Research Discussion Paper – RDP 9512 Consumption, Investment and International Linkages

Contents

• Introduction
• Australian and Foreign Business Cycles
• The Models
• Results
• Conclusion
• Appendix A: Solution to the Neo-Classical Investment Framework
• Appendix B: The Flow Measure of Durable Services
• Appendix C: Estimation with National Account Consumption Measure
• Appendix D: Tests for Declining Liquidity Constraints
• Appendix E: Cost of Investment-Stock-Adjusted Model
• Appendix F: Data
• References

We thank David Gruen and Geoff Shuetrim for comments. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia.