Although Australia has an equivalently large trading relationship with Japan and the US, current macro models often incorporate only US variables in the external sector of Australia. This paper explores the consequences of including both US and Japanese effects in the international sector of an SVAR model of Australia. The results indicate the significance of the Japanese effects. Excluding Jap...

This paper studies the relationship of financial development and income inequality in China over the period of 1978-2013. Using the structural vector auto-regression (SVAR), the empirical results are consistent with the GJ hypothesis of an inverted U-shaped relationship between financial development and income inequality. An economy in its initial stages of financial development would present i...

In conventional causal discovery, structural equation models (SEM) are directly applied to the observed variables, meaning that the causal effect can be represented as a function of the direct causes themselves. However, in many real world problems, there are significant dependencies in the variances or energies, which indicates that causality may possibly take place at the level of variances o...