ABSTRACT
The US and the UK equity markets, on the other hand, not only remain as significant trading partners, but are in fact also the major investment partners of Australia. The results from this chapter therefore provide new, robust and more comprehensive evidence in relation to the issue of Australia's equity market integration with its major trading partners. The issue of equity market price interdependence between Australia and its major trading partners is investigated during three subperiods: before financial deregulation, before the stock market crash and after the crash. Thus, the equity markets of Australia and its trading partners are not significantly linked in the long-run. This chapter reviews the trends and patterns of trade and investment interaction between Australia and its major trading partners. In terms of the equity markets, a very important deregulatory measure has been the abolition of fixed commissions which occurred in the US in 1975, in Australia in 1984 and in the UK in 1986..
