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...

This paper is an attempt to investigate the effect of fiscal policy on output in Indonesia using Structural Vector Autoregression (SVAR) methodology for the period 1983:1 – 2010:1. We use contemporaneous restriction and follow Blanchard and Perotti (1999) technique to identify structural fiscal policy shocks in Indonesia. The estimation results show that the government spending shocks are found...

This paper uses the SVAR approach to assess the degree of labor market flexibility – measured as the responsiveness of real and nominal wages to permanent and temporary shocks in eight EU member states (France, Italy, UK, Netherlands, Poland, Hungary, Slovakia and the Czech Republic) with a view to assessing their suitability for Euro-area membership. It is found that for Hungary and the Czech ...

The present paper analyses the impact of sales promotions on store performance, in the short and long term, from the retailer’s point of view. Relationships among promoted and regular sales in the hypermarkets of a large-scale retail chain of national importance, are investigated by means of a structural vector autoregressive model (SVAR). Statistically significant effects of sales promotions i...