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Transmission of External Shocks in the RBII Model

Author

Listed:
  • Malcolm L. Edey

    (Reserve Bank of Australia)

  • Elaine J. Kerrison

    (Reserve Bank of Australia)

  • Gordon D. Menzies

    (Reserve Bank of Australia)

Abstract

The paper gives an overview of recent work in the development of the RBII macroeconomic model, focussing on adjustments designed to reflect the post-deregulation financial environment. Changes to the RBII model have been made in two main areas. First, a clearing market for short-term funds has been introduced, making interest rates much more responsive to open market operations. Secondly, a number of adjustments have been made so as to model debt accumulation (both domestic and external) in more detail. The properties of the revised model are illustrated in simulations of a variety of domestic and external shocks. These simulations also serve to illustrate the implications of alternative assumptions about the short term operating objectives of monetary policy.

Suggested Citation

  • Malcolm L. Edey & Elaine J. Kerrison & Gordon D. Menzies, 1987. "Transmission of External Shocks in the RBII Model," RBA Research Discussion Papers rdp8710, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp8710
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    File URL: https://www.rba.gov.au/publications/rdp/1987/8710.html
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    Cited by:

    1. Dobrescu, Emilian, 2006. "Macromodel of the Romanian market economy (version 2005)," MPRA Paper 35749, University Library of Munich, Germany.
    2. Lynne Cockerell & Steven Pennings, 2007. "Private Business Investment in Australia," RBA Research Discussion Papers rdp2007-09, Reserve Bank of Australia.
    3. Emilian Dobrescu, 2006. "Integration of Macroeconomic Behavioural Relationships and the Input-output Block (Romanian Modelling Experience)," EcoMod2006 272100018, EcoMod.
    4. Nikola Dvornak & Marion Kohler & Gordon Menzies, 2005. "Australia's Medium‐Run Exchange Rate: A Macroeconomic Balance Approach," The Economic Record, The Economic Society of Australia, vol. 81(253), pages 101-112, June.
    5. WARWICK J. McKIBBIN & ERIC S. SIEGLOFF, 1988. "A Note on Aggregate Investment in Australia," The Economic Record, The Economic Society of Australia, vol. 64(3), pages 209-215, September.

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