Research Discussion Paper – RDP 7703 Price and Quantity Responses to Monetary Impulses in a Model of a Small Open Economy

Preface

This paper presents simulation analysis of the response of a version of the RBA76 model to three sustained monetary impulses. It was prepared for the 6th Australian Conference of Economists held at Hobart in May 1977. The paper is a companion to Research Discussion Paper 7702, in the sense that it uses the same version of the RBA76 model. As well as presenting further results on the dynamic response of the model, this paper sets out the reasons for the changes to the model which have occurred since the publication of Research Discussion Paper 7601.

As well as receiving the usual stimulus from colleagues in the Bank, the paper has benefitted from the comments of Michael Darby, Ben Friedman, Dale Henderson, David Rowan and David Laidler. None of these or our employer is necessarily in agreement with the analysis or conclusions of the paper.