The Industrial Impact of Monetary Shocks During the Inflation-Targeting Era in Australia

In this article, we analyse the industrial impacts of monetary shocks since the introduction of inflation targeting in Australia in 1990. These impacts are quantified by constructing a structural vector autogregressive model for a small open economy. Our results show that construction and manufacturing industries exhibit a significant reduction in gross value added after an unanticipated rise in the official cash rate. However, the finance and insurance industry, and the mining industry, seem to be unaffected by these shocks.