The 1980s witnessed large increases in corporate debt and sustained asset price inflation. More recently, asset prices, particularly commercial property prices, have fallen significantly. The effect of these changes on balance sheets, and their implications for the business cycle, have generated...

This paper examines the relationship between the inventory cycle and the business cycle. It uses both macro-economic data and data from surveys of individual firms’ actual and expected inventory accumulation. It is argued that over the past decade and a half, the amplitude of the inventory...

This paper examines the behaviour of the real Australian dollar exchange rates against the US dollar and Japanese yen over the last two decades. It is argued that country differences in relative productivity growth in the traded goods sectors can help explain movements in the real rates. Using...

Widespread increases in corporate leverage occurred over the 1980s in Australia. There was also considerable variation in leverage across firms. This paper uses a sample of 209 firms, observed annually between 1973 and 1991, to explore both cross-sectional and time variation in financial...

In January 1990, the Reserve Bank of Australia (RBA) began announcing and explaining changes in the target cash rate. This has increased public understanding of monetary policy and, by increasing the attention given to changes in interest rates, has affected the way in which changes in policy...

In this paper we develop a theoretical framework that helps to analyse the role of monetary policy in responding to asset-price bubbles. A large and rapid fall in the nominal price of assets that form the basis of collateral for loans from financial intermediaries can have adverse effects on...

Widespread reference to the real exchange rate stems from the belief that it is a useful summary indicator of key economic information. There exist, however, two forms of the real exchange rate: one form is based on deviations from purchasing power parity, while the other is based on the ratio...

This paper uses industry-level data to analyse labour-productivity growth over the past decade and a half. It focuses on the role of the service sector in determining the strength of productivity growth. In particular, it examines the factors that led to falling labour-productivity in the retail...

Increases in corporate debt in a variety of countries over the past decade have renewed interest in the relationship between leverage and the macro-economy. In general, the theoretical work on these links has outpaced the empirical research. This paper is an initial attempt to examine changes in...

This paper explores the relationship between the cash rate and interest rates set by financial intermediaries and interest rates set in auction markets. It presents estimates of the average degree of pass-through of cash rate changes to these other interest rates. It also presents a model of the...