Layton (1994)models the Australian economy as a combination of periods of 'normal' and 'sluggish' growth.

Question

Quizplus · Accepted Answer

Hamilton (1989)in the USA and Layton (1994)in Australia suggest an alternative to the long memory processes,termed segmented trend models.In effect,the history of an economy can be broken into segments of normal growth and sluggish growth.These models assume that neither real nor nominal shocks are persistent except where the shocks trigger a change in regime from normal growth to sluggish growth or vice versa.

Layton (1994)models the Australian Economy as a Combination of Periods