No. 1/2010: ASYMMETRIC UNEMPLOYMENT RATE DYNAMICS IN AUSTRALIA. Gunnar Bårdsen, Stan Hurn and Zöe McHugh

Abstract:
The unemployment rate in Australia is modelled as an asymmetric and non-linear function of aggregate demand, productivity, real interest rates, the replacement ratio, and the real exchange rate. If changes in unemployment are big, the management of of demand, real interest rates and the replacement ratio will be good policy instruments to start bringing it down. The model is developed by exploiting recent developments in automated model-selection procedures.