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Article: Business cycle synchronization between Australia and New Zealand.
- Article from:
- American Journal of Applied Sciences
- Article date:
- December 1, 2007
- Author:
CopyrightCOPYRIGHT 2007 Science Publications. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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INTRODUCTION
Business-cycle synchronization across two economies might be caused by the endogenous shock transmission between the two countries or by common exogenous influences. For example, the economic prosperity from 1960 through 1973 in Japan caused the mineral boom during the same period in Australia, because Japan needed the agricultural goods and mineral resources imported from Australia to accommodate this expansion[39]. This is an example of endogenous shock transmission that results in synchronization across economies. Similarly, when a common shock impacts two countries at the same time, the two countries might also be synchronized. For example, the ...