The objective of this paper is to evaluate the effectiveness of using a Markov switching model to measure the synchronization of business cycles. We use a Bayesian, Gibbs sampling approach to estimate a multivariate Markov switching model of GDP growth for several countries. We look for evidence...

Recent work by Hamilton, Waggoner and Zha (2004) has demonstrated the importance of identification and normalization in econometric models. In this paper, we use the popular class of two-state Markov switching models to illustrate the consequences of alternative identification schemes for...

This paper examines the response of consumption to income, credit and interest rate changes in Australia. In contrast to previous studies on consumption in Australian, this paper adopts an Euler equation approach. The Euler equation derives from the consumers' utility maximising problem under...

This paper presents a Bayesian assessment of the likelihood of unit roots in the unemployment rates of 16 OECD countries. Bayesian techniques for detecting multiple structural breaks in time series have recently been developed by Wang and Zivot (2000). I apply these tests to a data set recently...

Over the last 20 years or so, the volatility of aggregate economic activity has fallen dramatically in most of the industrialized world. The timing and nature of the decline vary across countries, but the phenomenon has been so widespread and persistent that it has earned the label: “the Great...

Books reviewed: William Coleman and Alf Hagger, The Rage Over Economic Rationalism and the Campaign Against Australian Economists Hian Teck Hoon, Trade, Jobs and Wages Yoram Amiel and Frank A. Cowell, Thinking About Inequality Paul Downward and Alistair Dawson, The Economics of Professional Team...

Recent work by Hamilton, Waggoner and Zha (2004) has demonstrated the importance of identification and normalization in econometric models. In this paper, we use the popular class of two-state Markov switching models to illustrate the consequences of alternative identification schemes for...

This paper replicates the results in Schularick and Taylor (American Economic Review v.102, no. 2, pp. 1029-1061; ST hereafter). Specifically, I replicate ST's results in the "narrow" sense by reproducing their calculations in the open-source econometrics package gretl. I also demonstrate the...