From West to East : Estimating External Spillovers to Australia and New Zealand

Author/Editor: Yan Sun
Publication Date: May 01, 2011
Electronic Access: Free Full text (PDF file size is 1,060KB).
Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper examines the size and source of external spillovers to Australia and New Zealand based on a structural vector autoregression (VAR) approach. It finds that during the last decade shocks from emerging Asia have become more important than those from the United States in affecting Australia’s business cycle. A 1 percent shock to emerging Asia’s growth is found to shift Australian growth by about 1/3 percent. Furthermore, there is evidence that commodity prices dominate the transmission of shocks from emerging Asia to Australia. The influence of emerging Asia on New Zealand is found to come indirectly through Australia, with Australian shocks transmitting almost "one-on-one" to New Zealand, largely through financial factors.
Series: Working Paper No. 11/120
Subject(s): Asia | Commodity prices | Emerging markets | External shocks | Financial sector | Regional shocks | Spillovers | Terms of trade

Author's Keyword(s): Spillovers | business cyles | Australia | New Zealand
Publication Date: May 01, 2011
ISBN/ISSN: 9781455262434/1018-5941 Format: Paper
Stock No: WPIEA2011120 Pages: 21
US$18.00 (Academic Rate:
US$18.00 )
Please address any questions about this title to