Another channel is through confidence effects – perhaps business and consumer confidence are influenced, not only by domestic developments, but also by international ones. Given  BIS Review 102/2001  5  the massive amount of information about the US economy that is routinely transmitted to Australians, it would not be surprising if this were the case.
It is clear that some international events show up in measures of confidence among Australian consumers and business, September 11 being an obvious example. But, on the other hand, consumer confidence is still above its long-term average, and like most measures of business confidence, its recent trough was in the March/April period of 2001 – about nine months ago.