A structural VAR model of the Australian economy

We develop an Ii-variable structural VAR for the Australian economy over th e period 1980 to 1998. The VAR methodology has only relatively recently bee n applied in the Australian context, despite its popularity in quantitative macroeconomics internationally. Our model includes an overseas sector whic h distinguishes between goods and asset markets so as to disentangle the ef fects of shocks emanating from each source. We utilize our model to dissect the Australian growth cycle into its separate influences and To study the Asian crisis. Throughout there is a strong emphasis upon identifying the im pact of monetary policy.