- Title: Mr
- Position: PhD Student - Department of Economics
- Principal supervisor: Dr Shuping Shi
- Associate supervisor: Dr Zhe Wang
- Thesis title: Testing asymmetries in the preferences of the Reserve Bank of Australia
- Abstract: This thesis investigates possible asymmetric behavior in the monetary policy of the Reserve Bank of Australia during economic downturns and upturns. The existing literature has focused on analyzing the asymmetry response of RBA with respect to the output gap and the inflation rate. We extend to consider another possible explanation that central bank could have asymmetric preferences for interest rate smoothing. We consider the impact of different loss functions on the first-order conditions and hence the estimation models are different. Generalized method of moments (GMM) is used to estimate the parameters of preferences of both models. We will use data from 1984 to 2014 to compare the results of these two approaches.