Research Article Open Access

Business Cycle Synchronization Between Australia and New Zealand

Jie Wei, Minsoo Lee and Christopher Gan

Abstract

There has been a high degree of economic and financial integration between Australia and New Zealand with free trade agreements linking the capital and labor markets. Given a strong economic relationship, business-cycle transmission is expected to exist between the two countries. By analyzing the shock-transmission channels via trade, monetary policy, and exchange rates between Australia and New Zealand we can infer that if Australia and New Zealand trade less, have more similar monetary policy structure, or have less similar economic structures they would have stronger economy correlation. The results also show that the highly integrated banking system between Australia and New Zealand is an additional avenue for shock transmission between both countries.

American Journal of Applied Sciences
Volume 4 No. 12, 2007, 1045-1053

DOI: https://doi.org/10.3844/ajassp.2007.1045.1053

Submitted On: 12 May 2007 Published On: 31 December 2007

How to Cite: Wei, J., Lee, M. & Gan, C. (2007). Business Cycle Synchronization Between Australia and New Zealand. American Journal of Applied Sciences, 4(12), 1045-1053. https://doi.org/10.3844/ajassp.2007.1045.1053

  • 2,023 Views
  • 1,932 Downloads
  • 0 Citations

Download

Keywords

  • Shock transmission channels
  • Business cycle
  • Monetary policy
  • Exchange rate pass-through