Steepness and deepness in the Australian macroeconomy

This study uses nonparametric tests - the triples test and the BDS test, to examine whether key Australian macroeconomic aggregates exhibit nonlineari ties and important 'steepness' and 'deepness' asymmetries at the business c ycle frequency. Evidence is found of nonlinearities but there is little evi dence of deepness in the Australian macroeconomy. However, there is evidenc e of steepness, especially concerning labour market variables, as well as b oth the CPI and M3. The evidence suggests that unemployment (employment) ri ses (falls) rapidly in recessions and only recovers slowly over time. Also, positive asymmetries in M3 are reflected in similar asymmetries in the CPI but not in output, consumption or investment.