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Examining the Economic Interactions Between Australia's Regions: Results From a Global VAR
Author(s) -
Moallemi Morteza,
Melser Daniel
Publication year - 2019
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12458
Subject(s) - vector autoregression , unemployment , economics , population , structural vector autoregression , impulse response , economy , economic geography , econometrics , monetary policy , macroeconomics , demography , mathematical analysis , mathematics , sociology
Australia's economy, like most national economies, is made up of several regional sub‐economies. How these regional economies interact is not well understood but is relevant to macroeconomic policy setting. We outline and estimate a flexible Global Vector Autoregression model using quarterly data on house prices, output, unemployment and population for the eight Australian states and territories from 1986 to 2016. Using region‐to‐region impulse response functions from this model we quantify the influence of shocks in one region on another. Our results highlight the high degree of influence of New South Wales on other regions over and above its size.