bluuebunny/crossref_metadata_2025 huggingface dataset:
The Optimality of Competitive Air Transport Markets: A Review of Aspects of the ICAP Report*
Authors: FINDLAY CHRISTOPHER C.
Published: October 2007

The results of a model of optimal air fares and flight frequency, which can also be used to generate market results, are applied to market failure arguments, contained in the recent ICAP Report, for regulation of international airlines. The arguments of the report are classified under headings of capacity and utilization, ‘on‐demand’ service and fare structure. It is argued contrary to the ICAP Report that the competitive result can he optimal in conditions likely to apply on international routes.
On the Use of Naive Expectations of Earnings per Share as Experimental Benchmarks*
Authors: FINN FRANK J. , WHITTRED G. P.
Published: October 2007

Both martingale and submartingale processes have been used as experimental benchmarks for corporate earnings forecasts or expectations in a large number of studies. This paper investigates the relative accuracy of forecasts from these two processes for a sample of Australian'firms. Submartingale models incorporating drift factors estimated over a large number of past observations consistently outperformed those using fewer observations, while the martingale model always outperformed the submartingale with drift factors estimaied over less than six prior earnings changes. The relative superiority of the martingale versus the best submartingale models used depended on whether a quadratic or linear error metric was deemed appropriate.
Company Tax Systems and their Effects on Investors*
Authors: OFFICER R. R.
Published: October 2007

The Campbell Committee recognized the importance of company tax systems, independently of the amount of tax revenue raised by such systems, on resource allocation. They recommended that the government should work toward a full integration of company and personal taxes. This study, which arose out of work for that committee, examines the effect on the main classes of investors of different company tax systems and speculates on the effect on dividend and financing decisions of companies.
The Determinants of School Participation Rates: A Cross‐Sectional Analysis for New South Wales and Victoria*
Authors: MILLER PAUL W.
Published: October 2007

Using data from the 1976 Australian Census of Population and Housing, estimates of the influence of family income. labour market conditions, religious denomination, foreign origin, locality and teenage income on the school participation rate of various teenage groups are obtained. These results suggest that family income is the most important determinant of school participation. The effect of the level of unemployment upon school participation is only modest. In some instances the direction of its influence is contrary to conventional wisdom.
Housing Interest Rate Deregulation and the Campbell Report*
Authors: ALBON ROBERT , PIGGOTT JOHN
Published: October 2007

It is argued that deregulation of housing interest rates would, under plausible assumptions, substantially increase the cost of housing finance in Australia, contrary to the impression created by the Final Report of the Australian Financial System Inquiry (the Campbell Report). Characteristics of the market for owner‐occupier housing finance, on both the demand and supply sides, suggest that the deregulated market rate will be approximately equal to the uncontrolled rate under regulation. The weighted average interest rate for owner‐occupier housing finance at December 1981 is more than three percentage points below the uncontrolled rate. The authors conclude that while this result does not of itself constitute an argument against deregulation, it does imply that deregulation would have a substantial distributional impact.
Generalized Tâtonnement and the Solution of Economic Models*
Authors: GINSBURGH VICTOR , WAELBROECK JEAN
Published: October 2007

The theoretical literature on tâtonnement processes leads to the conclusion that convergence is guaranteed only urrder fairly restrictive assumptions. Recently, however, large competitive equilibrium models have been successfully solved using algorithms inspired by tâtonnement processes.

This paper stresses the idea that a model builder has more freedom to set up the process than a theoretician, for whom only one assignment of prices to excess demand is reasonable; for computational purposes, any assignment is acceptable. The diagonal dominance criterion provides guidelines to set up such an assignment. It is used to show that even intractable examples of global instability can easily be solved.
Unemployment, Real Wages and the Money Supply in Australia*
Authors: PITCHFORD J. D.
Published: October 2007

Many observers have attributed the high unemployment experienced in Australia in the 1970s to the rises in real wages which have occurred in the decade. An alternative or additional hypothesis is that unemployment has resulted from policy directed at controlling inflation and that this has been exacerbated by the occurrence of adverse external factors, particularly bul not solely the oil price shocks, which have made inflation more difficult than otherwise to control.

The results of econometric tests suggest that a significant portion of fluctuations in the unemployment rate can be explained by real wage movements, and as well monetary policy through its effects on the real money supply also seems to affect unemployment. Both real wage rises and monetary restrictions appear to have contributed to the jump in unemployment in 1974–75, and since then the continuing high and rising unemployment rate is closely associated with the low growth rate of the real money supply.
Unemployment in Australia: Duration and Recurrent Spells*
Authors: TRIVEDI P. K. , BAKER G. M.
Published: October 2007

Using a parametric technique. this paper estimates average completed duration of unemployment for several age and sex categories. It shows that the use of Labour Force Survey data leads to underestimates due to the presence of recurrent unemployment. When allowance is made, using A BS Persons Looking for Work and Labour Force Experience data, it is shown that new entrants to unemployment in 1981 could expect to remain unemployed for nearly six months. For teenagers evidence is presented to suggest that, contrary to current economic thought, teenagers may on average be unemployed for longer periods per spell and may have less experience of recurrent spells than their counterparts. It also shows that changes in the unemployment rate are dominated by changes in duration.
The Orani‐Macro Interface: An Illustrative Exposition*
Authors: COOPER RUSSEL J. , McLAREN KEITH R.
Published: October 2007

The paper provides on illustration of the procedure used to interface the MACRO and ORANI modules of the IMPACT Project. The main interfacing problem is that of temporal aggregation. This problem arises when information is to be passed between a dynamic disequilibrium model such as MACRO and a comparative static general equilibrium model such as ORANI. A diagrammatic treatment of the solution to this problem is presented. The procedure is then illustrated by a numerical experiment.
Expanding Exports and the Structure of the Domestic Economy: A Monetary Analysis*
Authors: TURNOVSKY STEPHEN J.
Published: October 2007

This paper analyzes the dynamic adjustments of a small, open economy faced with the certain prospect of a future export (resources) boom. It is shown how the adjustment occurs in three phases. First, the initial expectation generates an immediate (discrete) appreciation of the exchange rate. Secondly, prior to the export boom, the exchange rate continues to appreciate gradually, while a dissimulation of bond holdings by domestic residents occurs, After the boom, the exchange rate gradually appreciates further while the balance of trade moves into surplus and domestic residents begin to accumulate bond holdings. These adjustments are rejected in the movement of the relative price of traded to non‐traded goods and the implications of this for the structural adjustment of domestic industry are discussed.
Pension Benefits and the Decline in Elderly Male Labour Force Participation*
Authors: MERRILEES W. J.
Published: October 2007

This paper uses time‐series econometric methods to unravel the causes of the secular decline in the labour force participation rate of males aged 65 years and over. The study finds that most of the sharp and sudden decline in the participation rate during 1972–76 is atria but able 10 more generous age pension benefits, with minor support from the discouraged worker effect associated with the current recession. A key feature of the model is the inclusion of several social security policy variables, apart from the value of the old‐age pension. These policy variables include the ‘free area’ means test limit and the 1976 switch from a means to an income test.
Subsidies to the Arts with Multiple Public Donors*
Authors: AUSTEN‐SMITH DAVID
Published: October 2007

This paper develops a theoretical framework for analyzing public funding for arts markets in which both a national‐level arts council and local governments are potential donors. While the arts council is assumed to allocate grants to maximize the expected number of theatres achieving an ‘acceptable’ level of output, the local government is only concerned to maximize its total budget from local tax revenues. Despite this objective, a rationale for local governments to give grants is derived. The total grant allocation to any institution arises as an equilibrium outcome to a game played between the arts council and the relevant local government. Theatre managements take account of this allocation process in making their output decisions. Several empirical propositions are derived.
Mineral Exploration and the Neutrality of Rent Royalties*
Authors: CAMPBELL H. F. , LINDNER R. K.
Published: October 2007

Bayesian techniques are used to analyze the effect on mineral project selection of the imposition of an ideal form of resource rent tax in which all costs, including exploration costs, are fully deducted from taxable income. It is demonstrated that higher rates of resource rent tax generally will alter the a priori probability of a deposit being mined due to a direct risk‐sharing effect as well as indirectly by changing the amount of exploration undertaken before the firm decides whether to mine or not.
Economic Policy Challenges for Sustained Growth*
Authors: HAWKE R. J. L.
Published: October 2007

This paper presents the views of the Prime Minister (as at March 1985) on some of the major economic challenges facing Australia and some of the policy soptions his government proposes to pursue in order to maintain the economic recovery without a resurgence of inflation and to improve Australia's long‐term growth performance.
Property Rights, Regulation and Efficiency: A Further Comment on Australia's Two‐Airline Policy*
Authors: KIRBY MICHAEL G. , ALBON ROBERT P.
Published: October 2007

A model of profit regulation under the Two‐Airline Policy suggests that the government‐owned firm will be less cost efficient than its private counterpart. Econometric evidence is presented to support this hypothesis. The analysis and evidence is contrary to a widely accepted view.
Asset Substitution and Aggregate Liquidity in Australia: 1969–1983*
Authors: HORNE JOCELYN , MARTIN VANCE , BONETTI SHANE
Published: October 2007

This paper has two goals. The first goal is to examine the degree of substitutability between various bank and non‐bank assets and a reference asset using A ustralian quarterly data for the sample period 1969(4)‐1983(2). Particular attention is directed towards quantifying the degree of liquidity of financial innovations introduced recently into the A ustralian financial sector. The second goal is to construct a weighted monetary aggregate series derived. explicitly from microeconomic consumer demand theory. While both the bank innovations and building society deposits are close substitutes for currency, the aggregation restrictions implicit in the Australian monetary aggregates beyond Ml are violated.
A Further Comment on the Zero Row‐Sum Property of Mean‐Variance Portfolio Allocation Models
Authors: VALENTINE T. J.
Published: October 2007

This note considers the conditions under which asset demand equations arising out of mean‐variance portfolio allocation models have symmetric interest rate effects. If these conditions are satisfied, it is also valid to write the asset demand equations as functions of interest rate differentials rather than interest rate levels.

The necessary condition for symmetry is that the ‘expected return effect’ be equal to zero. This will not always be the case and therefore symmetry of interest rate effects is an hypothesis which should be tested rather than a restriction which can be imposed on estimated asset demand equations. Statistical tests of this restriction often lead to its rejection.
More or Less Equal? Australian Income Distribution in 1933 and 1980*
Authors: McLEAN IAN , RICHARDSON SUE
Published: October 2007

Utilizing information in the 1933 census we estimate several measures of individual and household income inequality for that year. Allowance is made for the effect of the Depression on the 1933 income distribution, revealing a clearly adverse impact. Comparisons with recent years indicate marked declines in aggregate income inequality.
Who Benefits from Public Utilities?*
Authors: HARTLEY PETER , TRENGOVE CHRIS
Published: October 2007

We model the determination of output, factor payments and prices within publicly owned firms, assuming the firms are managed by utility‐maximizing employees monitored by vote‐maximizing politicians. The choice of a public monopoly to supply the output is most suited to further the redistributive aims of the politicians, but will also be favoured by employees who can capture some rents.
Agricultural Policies of Industrial Countries and their Effects on Traditional Food Exporters*
Authors: ANDERSON KYM , TYERS ROD
Published: October 2007

A multi‐commodity model of world food markets is used to quantify the adverse impact of agricultural policies in Western Europe and East Asia on farmer welfare in Australasia and North America. The results suggest that net farm incomes for these traditional food exporters would be one‐third greater than in the absence of protectionism in other industrial countries. For Australian farmers this represents as much as A$30 000 per farm, or more than three times as much as the adverse impact on them of Australia's manufacturing protection. Econometric analysis suggests that agricultural protectionism is likely to continue to grow as per capita incomes and agricultural comparative disadvantage increase in industrial countries.
Migrants' Unemployment: The Determinants of Employment Success*
Authors: INGLIS PAUL A. , STROMBACK THORSTEN
Published: October 2007

This paper examines the influence of individual characteristics on the chance of being unemployed. Most of the attention is focused on the characteristics specific to migrants; birthplace, period of residence, and proficiency in the English language. The analysis is based on data from the 1981 Census. The results indicate that a migrant is less likely to be unemployed the longer he has been in Australia. The likelihood of being unemployed falls most during the first two years after arrival for all birthplace groups. Most of the higher unemployment rate for migrants relative to Australian‐born is due to the high chance of recently arrived migrants being unemployed. It is argued that immigration policy should not be determined without regard to the labour market situation
Analysis of the 1980 Sydney Survey of Work Patterns of Married Women: Further Results*
Authors: ROSS RUSSELL T.
Published: October 2007

Using cross‐section data from the 1980 Sydney survey of the work patterns of married women, this paper contributes to the very scarce Australian stock of disaggregate econometric studies of the labour market activities of married women. Labour force participation, hours of work and wage functions (reservation wage as well as market wage) are estimated in a second‐generation static labour supply framework. Unique features of the study include the availability of direct data on previous market experience, a formulation of the impact of children on the participation decision which permits testing for the presence of economies of scale in child‐minding activities, estimation of the reservation wage function, and a data base which permits a clear distinction between earnings and other forms of income.
Inflation: The Invisible Foot of Macroeconomics*
Authors: CARTER MICHAEL , MADDOCK RODNEY
Published: October 2007

We take a simple, well‐known macroeconomic model and treat it as a game between two players—the government and an all‐embracing union. The payoffs have the form of a prisoner's dilemma. The equilibrium outcome produces unwanted inflation and is not Pareto optimal. This is despite the fact that all participants are assumed to have full information. This result is shown to be quite robust to the form of the model and is not affected if one of the players is forced to announce its strategy in advance. This we call the invisible foot of macroeconomics.
Agricultural Policy Debate: A Survey*
Authors: EDWARDS GEOFF W.
Published: October 2007

A survey is provided of writings between 1978 and 1985 on or directly relevant to Australian agricultural policy. The areas covered are: background and overview; industry policy, including tariff compensation, home consumption price schemes. quotas, input subsidies and futures trading by marketing boards; stabilization; adjustment and the capital market; and macroeconomics and agriculture. An increasingly critical approach has been taken in identifying sources of inefficiency in agriculture and in considering ways of reducing them. Private interest explanations of policy descisions have received serious study and macroeconomic issues have received increasing attention.
A Simple Model of Recent Changes in the Residential Property Market*
Authors: NEVILE J. W. , TRAN‐NAM B. , VIPOND J. , WARREN N. A.
Published: October 2007

A simple model of the Australian residential property market incorporating two form of tenure, owner occupation and renting, is developed. While the supply of housing services is common to both tenures, the demands of tenants and owner occupiers are independent and separate. The equilibrium values of rental and house prices are determined simultaneously in the two sectors. The model is then used to qualitatively assess the likely effects on rents and house prices of some important elements of the September 1985 tax package.
Contemporary Political Economy: Common and Contested Terrain
Authors: STILWELL FRANK
Published: October 2007

This paper analyzes the nature of contemporary political economy. The attempt to distinguish political economy from orthodox economics according to the role played by value‐judgements or policy prescriptions is rejected as misleading. Instead the principal concerns of political economy are identified by reference to six contributory currents of thought, ranging from the critique of neoclassical economics and the reconstruction of Keynesian economics, through the development of Marxist and institutional analyses, to the influence of feminism and environmentalism. The paper concludes with some comments on the place of political economy in the university curriculum.
Monetary Expansion, International Trade and Capital Accumulation*
Authors: TSO Y. ALLEN
Published: October 2007

This paper considers the long‐run domestic and foreign effects of a domestic monetary expansion in a two‐country model in which the processes of capital accumulation at home and abroad interact with each other via international trade. We investigate the global stability conditions and their relationship with the comparative dynamic effects of a monetary expansion in the model. In particular, we show that under plausible global stability conditions the early analytical results obtained by Roberts (1978) and Shieh (1984) may be reversed in the two‐country model.
The Expectations Theory of the Term Structure of Interest Rates in Australia*
Authors: TEASE WARREN J.
Published: October 2007

The aim of this paper is to test the expectations theory of the term structure of interest rates in the Australian market for short‐term financial assets. The paper finds that the joint hypothesis of the expectations theory and zero (or a constant risk premium) cannot be rejected in the period since the introduction of the tender system for sale of government securities in 1979. The floating of the Australian dollar in 1983 did not alter the findings.
The HQ Production Function
Authors: KOHN ROBERT E.
Published: October 2007

A sixth‐degree production function of Henderson and Quands (1958), that exhibits increasing and then decreasing returns to scale, is generalized to allow for non‐homotheticity as well as homotheticity. Although the long‐run function lacks the desirable short‐run attribute of the original function, it has the advantage that the cross‐marginal product is conventionally positive The simplicity and versatility of die HQ production function make it useful for computer simulations of long‐run competitive market equilibrium with a determinate number of firms.
Incorporating International Competitiveness into the Demand for Labour Function: Some Issues of Specification and Interpretation*
Authors: TRTVEDI P. K. , ALEXANDER J. N.
Published: October 2007

This paper attempts to clarify the theoretical status and the empirical role of measures of ‘international competitiveness’ that have been used in econometric demand for labour equations. Some currently popular alternatives are finked to a simple version of the Salter‐Swan‐Dornbusch (‘Australian‘) dependent economy model which is found to provide insufficient basis for choosing between alternative measures, which in the Australian case at least are found to behave rather differently. In explaining employment in Australia during the period 1971‐83, the preferred competitiveness variable is found to play a marginal role only with estimated long‐run elasticity similar to that for the real labour cost
Reflections on Econometric Methodology*
Authors: PHILLIPS P.C.B.
Published: October 2007

General issues about the methodology of empirical econometric research are discussed. It is argued that the most successful paradigms for applied work are the ones that have a capacity to survive and to evolve into more useful forms as these are needed Paradigms that embrace progressive modelling principles, such as those espoused by David Hendry, seem most amenable to this criterion. It is also argued that econometric theory has a large role to ploy in helping us to understand the strengths and the weaknesses of a methodology and to codify what its prescriptions entail. The time‐series methodology of David Hendry is considered in some detail. It is shown that the Hendry methodology comes remarkably close to achieving an optimal inference procedure for long‐run structural relationships even though it is conducted on a single‐equation basis. The findings indicate that the methodology may be unproved further to achieve results that are equivalent to optimal estimation.

Detailed responses are provided to the panel discussions on econometric methodology by Dennis Aigner, Clive Granger, Edward Learner and Hashem Pesaran that were presented at the 1988 Australasian Meetings of the Econometric Society in Canberra Some personal reflections are offered on the many issues that arise from this panel discussion, including the merits of Bayesian and classical approaches, asymptotic theory, experimental and non‐experimental data, model evaluation, diagnostic testing sharp prior hypotheses, the use of graphics, and the role of economic theory in empirical modelling.
Substitution Between Private and Public Consumption in Australia*
Authors: OLEKALNS NILS
Published: October 2007

Large increases in the private sector's savings ratio during a period of rapid growth in the relative size of the public sector has led to the suggestion that substitution between private and public consumption may be an important fcature of the Australian economy (Clements 1979). In this paper, empirical estimates are presented which indicate that no such substitution exists The estimates are derived from a theoretical model of consumption which is based on inter‐temporal optimization in a stochastic environment. The estimates also suggest that private sector consumption behaviour is consistent with the joint hypothesis of rational expectations and Ricardian equivalence
A Brief Overview of the Economics of Incomplete Markets
Authors: LAFFONT JEAN‐JACQUES
Published: October 2007

This paper was motivated by my participation in the Economic Theory Symposium of the 1988 Australian Economics Congress, Canberra. It represents only one perspective on an immense literature. As the reader will notice, I have often referred to my own work. for two reasons. The first is because it is what I know best, the second is to provide an illustration of the in efficiency resulting from the incentive constraints editors face in contracting for surveys.
New Light on the Origins of Modem Economics*
Authors: GROENEWEGEN PETER D.
Published: October 2007

This paper reviews recent books on the 17th‐ and 18th‐century economics for the Lght rhq shed on the origins of economics wuh porticular reference 10 Hutchison's Before Adam Smith. The three sections focus successively on the role of secularization in the origins of economics, Hutchinson's chronological divisions as used in his book, and some relationships between this part of the history of thought and modern controversy. The importance of recent research on Jansenist theology and economic order, pre‐Smithian economics as crucial to understanding identification of an alternative surplus approach or production‐exchange dual in economics are emphasized in sections 1 and 3 respectively.
The 1980s Economic Growth Weakness in Europe: Focusing on the Supply Side*
Authors: DONGES JUERGEN B.
Published: October 2007

For some years now, most West European economies (including Germany) have been operating with a striking lack of dynamic growth The consequences are that (i) domestic unemployment stays stubbornly at high levels. (ii) the capital stock is ageing, which makes European firms more vulnerable to growing international competition; (iii) the production structure does not shift sufficiently to keep abreast of current technological breakthroughs (iv) the attractiveness of Europe as a location for investment suffers, and (v) the correction of the large external imbalances among the major trading nations is delayed.

The paper emphasizes that Europe's predicament is basically due to supply rigidities of various kind They have been created on the one hand by the governments' persistence in completing the Welfare State up to a point at which behaviour patterns and attiudes in society have been seriously deformed On the other hand governments have been caught in a train of well‐organized special‐interest groups and as a result, have spread defensive interventions in markets over ever wider areas of the economy.

The key to getting Europe's economies back onto a path of sustained non‐inflationary, job‐creating growth, for which there is certainly much potential, lies in the provision of a climate favourable to imaginative and risk‐taking investors and innovators As domestic demand is expanding it is now essential to enhance the supply responsiveness of the economic system Steady and foreseeable policies at the microeconomic level can help a lot They must aim at (i) dismantling non‐tariff barriers in international trade, including the long overdue overhaul of the Common Agricultural Policy; (ü) cutting public subsidies across‐the‐board and using the corresponding budget savings for significant tax cuts; and (iii) deregulating the economy where needed, in particular in services and the labour market The official commitment to complete a truly common market in the EC by the end of 1992 should impart a strong momentum to supply‐oriented policies, since widespread deregulation is central to the prospects of reaching this objective efficiently.
The New View of Minerals and Economic Growth*
Authors: TILTON JOHN E.
Published: October 2007

Resource economists have long been fascinated by the relationship between minerals and economic growth. This interest has historically been based in pan on the concern that mineral resources may someday constrain world economic growth, or worse, force a painful reduction in the living standards of the industrialized countries

In recent years, however, a very different view of minerals and economic growth has emerged. This new view maintains that economic growth has over the last decade or two become ‘uncoupled’ or independent of minerals and other primary products. Economic growth no longer requires an increase in mineral consumption, and no longer stimulates the demand for metals and other mineral commodities. The new view offers an explanation for the stagnation in metal and mineral consumption since the early 1970s, and presumably was fostered by the depressed conditions of mineral markets over the past decade.

An examination of the forces behind the stagnation, however, suggests that the new view is only partially correct Sectoral shifts, the rise of high technology products within manufacturing, resource‐saving technology, and material substitution have together caused intensity‐of‐use trends to deteriorate. As a result, metal consumption can now remain constant or even decline at the same time the economy is expanding, if rate of economic expansion is less than the rate of decline in intensity‐of‐use.

While the relationship between minerals and economic growth has changed in recent years, the two are not independent Faster economic growth requires and stimulates faster growth (or a slower decline) in mineral consumption. This finding has implications for both the short‐ and long‐run behaviour of metal and mineral markets.
Colin Clark: An Interview*
Authors: HIGGINS CHRISTOPHER I.
Published: October 2007

Colin Clark was named Distinguished Fellow of the Australian Economic Society in 1987. This interview explores with him the development of his professional contributions in national accounting and early Keynesian economics; in his The Conditions of Economic Progress and in policy work in Queensland; in population, development and taxation. Taping was in 1988, with Clark in his eighty‐third year, full transcripts are available, as indicated in the article
Uban Tolled Roads and the Value of Travel Time Savings*
Authors: HENSHER DAVID A. , MILTHORPE FRANK W. , SMITH NARIIDA C. , BARNARD PETER O.
Published: October 2007

The recent interest in the privatization of major urban roads has opened up the debate on the tolling of such facilities. Central to the identification of optimal tolls is a knowledge of the amount of money individuals are willing to outlay to save travel time. This paper combines a utility maximization framework with stated response data to determine values of time savings in the presence of varying levels of toll for the full set of urban journey purposes. The empirical results provide a basis for establishing one benchmark for toll setting, in the context of substantial lengths of urban roads. There are no tolled urban roads in any major urban area throughout the world
Richard Manning 1943–1989
Authors: LEONARD DANIEL
Published: October 2007

The community of academic economists and professionals has suffered a great loss by Richard Manning's untimely death. He was barely halfway through his career and at the peak of his ability as a researcher, teacher and leader. Many students will no longer encounter his insight into economic theory, many colleagues will miss his ability to focus discussion into fruitful avenues and many good papers will not be written with the same clarity of thought The discipline of economics is poorer for it.
Allocating Jobs under a Minimum Wage: Queues vs. Lotteries*
Authors: GANG IRA N. , TOWER EDWARD
Published: October 2007

In this paper we provide a simple diagrammatic technique for incorporating variable labour supply into the specific factors model We then use the framework to analyze the positive and normative effects of a minimum wage both with a broadly based employment lottery (on‐the‐job search) and with an employment queue (the Harris‐Todaro case). We discover that with a given minimum wage replacing the queue with a lottery may be welfare reducing.
East‐West Airlines' Sydney‐Melbourne Service: Market Expansion or Demand Diversion?
Authors: HARTLEY PETER , TRENGOVE CHRIS
Published: October 2007

Data on 1278 flights on the East‐West Airlines Sydney‐Albury‐Melbourne services, beginning when the Sydney‐Melbourne excursion fare was first offered, are used to estimate three demand curves for the jointly provided services. The elasticities of demand for the Sydney‐Melbourne service suggest it expanded the market as much as it attracted passengers from the trunk carriers. The econometric problem of joint estimation with censored dependent variables should be of general interest.
The Real Federal Budget Imbalance*
Authors: MAKIN TONY
Published: October 2007

Using the link between nominal budget imbalances and changes in the public debt, this paper discusses the rationale and provides estimates of the real Federal budget imbalance which, over the past decade, was in surplus more often than indicated by actual outcomes.
Costs under Regulation and Deregulation: The Case of US Passenger Airlines*
Authors: FORMBY JOHN P. , THISTLE PAUL D. , KEELER JAMES P.
Published: October 2007

Privatization, the removal of regulatory control and similar changes in property rights within firms can be expected to shift cost functions downward and permit increased output, lower final service prices and more efficient resource allocation The US Airline Deregulation Act of 1978 was clearly expected to have these effects. This paper investigates whether the widely anticipated reduction in costs following the Airline Deregulation Act of 1978 actually occurred. We utilize an empirical procedure that explicitly takes the multi‐product characteristics into account and identifies the various sources of changes in costs. The change in airline's costs are decomposed into components and separately measured to identify the effects attributable to deregulation A number of other countries are now considering important changes in the public ownership and control of their airline industries and a quantitative assessment of the actual effect of US deregulation on costs may be thought of as providing lower bound estimates of what might be expected in other countries.
Risk and Information: a Hedonic Price Study in the New Zealand Housing Market*
Authors: MAANI S. A. , KASK S. B.
Published: October 2007

This paper employs the hedonic price approach developed by Rosen (1974) and recently extended to study the effects of potential natural hazards on consumer behaviour. Hedonic prices are used to estimate home buyers' willingness to pay to avoid a high‐pressure gas pipeline installed in a residential area Studies of risk and information (e.g. Brookshire et al., 1985, Smith and Johnson, 1988) suggest that the subjective probability of a hazard occurring differs from the objective probability. If we allow for this, and relax the assumption of full information on the part of home buyers, our theoretical analysis indicates that a single hedonic price is not sufficient because hedonic prices are likely to change with a change in information. Our empirical analysis of cross‐sectional data across time is in accord with the theoretical model, although not highly significant
Efficiency in the Forward Foreign Exchange Market: Weekly Tests of the Australian/US Dollar Exchange Rate January 1984‐March 1987*
Authors: KEARNEY COLM , MACDONALD RONALD
Published: October 2007

This paper examines the relationship which exists between the spot and forward Australian/US Dollar exchange rates for one‐, three‐and six‐month contracts using weekly data over the period January 1984—March 1987. The paper splits the forward premium into a component due to risk and one which is due to a forecasting error, and this analysis is suggestive of a time‐varying risk premium.
Open Market Operations in Australia: A US Perspective*
Authors: DOTSEY MICHAEL
Published: October 2007

This paper investigates open market operations in Australia and incorporates some key features of these operations into a simple rational expectations macroeconomic model Where relevant, comparisons with US operating procedures are made. The major finding is that the Reserve Bank of Australia like the Federal Reserve uses the overnight interest rate as its policy instrument However, specific features of the Australian money market imply that direct control of the interest rate will be a more efficient policy in Australia than in the United States.
Predicting the Monthly and Annual Current Account Balance from Provisional Data*
Authors: BEWLEY RONALD , PARRY THOMAS
Published: October 2007

This paper uses provisional monthly data to predict the one‐month‐ahead and one‐year‐ahead current account balance. Single‐equation methods are compared to an eight‐equation VAR model that utilizes the Box‐Tiao (1977) modifications. It is found that the single‐equation model of the current account out‐performs the system method for the short‐ term but the positions are reversed for the annual forecast
Regional Consumption Patterns in Australia: A System‐Wide Analysis*
Authors: SELVANATHAN SAROJA
Published: October 2007

This paper uses consumption data for eight commodity groups to present a system‐wide analysis of consumption patterns in the six States of Australia. We test the hypotheses of demand homogeneity, Slutsky symmetry and preference independence using Monte Carlo simulation techniques and find general acceptance of these hypotheses for the six States. The paper also presents demand elasticities for the eight commodity groups in each State. We find, overall, food, clothing and housing commodity groups are necessities while durables, medical care, transport and miscellaneous groups are luxuries. We also find evidence in support of similarity of consumption patterns across the six Australian States.
Models of Trade Union Behaviour: A Synthesis
Authors: CREEDY JOHN , McDONALD IAN M.
Published: October 2007

In this paper, the following four models of wage determination by trade unions, namely simple monopoly, wage‐bargaining (or ‘right to manage’), efficient bargains and insider‐dominated, are placed within a single framework. It is shown that the pattern of wage behaviour is the same in each of the four models. It is also shown that when taxation is introduced the impact on wages of changes in marginal and average rates of tax is similar across the models.
Assessing the Impact of US Macroeconomic Policies and Inflation Rates on the Australian Economy*
Authors: BURDEKIN RICHARD C.K.
Published: October 2007

A three‐equation system is specified with Australian monetary base growth, the domestic budget deficit and the domestic inflation rate as dependent variables Lagged values of these three variables and their US counterparts are entered as explanatory variables in each equation. Results for 1967‐83 suggest a possible effect of lagged US monetary base growth on Australian monetary base growth plus a positive direct impact of US inflation on Australian inflation.
A Decomposition of Changes in Labour Productivity in Australia: 1970‐71 to 1989‐90*
Authors: DIXON PETER B. , McDONALD DAINA
Published: October 2007

We show that business‐cycle phenomena, climatic conditions and industrial structure are important determinants of annual variations in Australia's labour productivity growth. Another finding is that Australia's productivity slowdown in the 1980s was associated with a reduction in capital growth per unit of labour. The methodology relies on production functions at the industry level We analyze the sensitivity of results to the specification of these functions.
On the Estimation of Total Expenditure Elasticities from Derived Engel Functions with Applications to Australian Micro‐Data*
Authors: TRAN‐NAM BINH , PODDER NRIPESH
Published: October 2007

This paper proposes a method of estimating total expenditure elasticities based on the implicit Engel equations derived from the Lorenz curve of total expenditure and concentration curves of commodity‐specific expenditures. The proposed procedure is computationally easy to implement and produces elasticity estimates which appear to satisfy the adding‐up criterion well For illustration, the method is applied to the 1984 Household Expenditure Survey and an attempt is made to compare the present estimates with those generated in previous Australian studies.
Specific Purpose Payments and the Commonwealth Grants Commission*
Authors: BUTLER J.R.G.
Published: October 2007

The Commonwealth Grants Commission has, over the past ten years, been concerned with assessing the per capita relativities to be applied to the distribution of general revenue grants to the States in Australia to achieve fiscal equalization. In arriving at these assessments, the Commission has developed a number of approaches to the treatment of specific purpose payments. It is argued that one of these approaches–the inclusion approach–has an overriding effect which may place fiscal equalization in conflict with other objectives of Commonwealth policy. The nature of this conflict and its management are then explored
A Note on the Taxation of International Capital Income Flows
Authors: BRUCE NEIL
Published: October 2007

Seemingly persuasive arguments can be made to suggest that income from foreign‐owned capital should be taxed by a small open economy and that it should not be taxed I show that the case for taxing foreign capital income as part of an ‘optimal’ tax scheme rests on the assumption that tax rates on other forms of income are not set optimally. In particular, if economic profit is not fully taxed, a tax on foreign capital income is desirable. If all tax rates are set optimally, foreign capital income should not be taxed by the capital‐importing country.
Exchange Rates, Market Structure, Prices and Imports*
Authors: SIBERT ANNE
Published: October 2007

Eighteen months after sizable declines in the US and Australian dollars in 1985, the trade accounts of both countries showed little improvement In some markets import prices failed to decline as expected Was this due to normal lags, or are there markets where exchange rate responses are limited? This paper analyzes the impact of firm behaviour and market structure on the sensitivity of import markets to exchange rate changes.
Fiscal Decentralization and Public Sector Size in Australia*
Authors: GROSSMAN PHILIP J.
Published: October 2007

This paper examines the impact of fiscal decentralization and intergovernmental collusion, and the resulting fiscal dependence, on the size of the public sector in Australia. Contrary to evidence for the United States, fiscal decentralization is found to have no impact on public sector size in Australia. Three possible explanations for this finding were suggested the relatively small number of lower‐level governments; the economic insignificance of local governments; and the relative immobility of citizens. Fiscal dependence of State governments on the Commonwealth proves a significant determinant of public sector size, consistent with findings for the United States.
A Survey of Theories of Cropshare Tenancy*
Authors: TASLIM M. A.
Published: October 2007

Cropshare tenancy is a contractual arrangement whereby the productive inputs owned by two parties are brought under the same management to produce an output that is shared between them in a pre‐arranged proportion. It has doggedly survived for millenia in different parts of the world. Its economic advantage was, however, not apparent to the early economists, and curiously they regarded it with much disapproval in spite of its voluntary nature. Recent research has unveiled the rationale of its occurrence and established its versatility in effectively responding to different environments and a multitude of market inefficiencies. It is indeed a redundant system if all markets exist and are perfect. But when some markets are non‐existent or suffer from distortions, cropsharing can satisfactorily overcome these inefficiencies to increase production and thereby improve welfare of one or both parties.
Occupational Segregation Indices in the Multidimensional Case: A Note*
Authors: SILBER JACQUES
Published: October 2007

An extension of an index of segregation recently proposed by Karmel and Maclachlan (1988) is suggested which allows the analysis of occupational segregation in the multidimensional case.
Oligopolistic Pricing of Crude Oil Futures
Authors: PHLIPS LOUIS
Published: October 2007

This paper applies a game‐theoretic model of oligopolistic pricing to the crude oil futures contracts traded on the Brent 15‐Day market and the London International Petroleum Exchange (IPE). Particular attention is given to the organizational features of the Brent 15‐Day market and to the successive changes in the IPE contract
Efficiency in Currency Futures Markets SURE vs. FIML Estimates
Authors: AVSAR SERDAR A.
Published: October 2007

The major aim of this paper is to determine the appropriate estimation technique for testing the market efficiency hypothesis. The weak and semi‐strong forms of the market efficiency hypothesis have been tested for five actively traded futures currency markets for the period 1974‐86. The test has been carried out under the assumption of a constant risk premium.
On the Neutrality of the Resource Rent Tax*
Authors: FRASER ROB
Published: October 2007

This paper investigates the existence of an investtnent'neutral Resource Rent Tax using a model of optimal investment to extract an unknown quantity of resource stock. This model is solved by numerical methods to show that the levels of profit margin and resource stock uncertainty are key parameter values in determining both the existence and the characteristics of an investment‐neutral Resource Rent Tax.
Gender Roles, Occupational Choice and Gender Wage Differential*
Authors: VELLA FRANCIS
Published: October 2007

This paper addresses the impact of occupational choice and the perception of gender roles on the gender wage differential. We examine the effect of occupational choice upon the level of wages and investigate the determinants of occupational choice. The evidence supports earlier findings that the wage differential is caused by demand discrimination within occupations. We also conclude that if females had a less traditional attitude towards their role in the labour market they would generate an occupational distribution that would produce a higher wage
Sir Leslie Melville: an Interview*
Authors: CORNISH SELWYN
Published: October 2007

This interview with Sir Leslie Melville focuses on his career which began in 1924 when he was appointed Public Actuary of South Australia. He became the Commonwealth Bank's first economist in 1931. In 1944 he led the Australian delegation to the United Nations Monetary and Economic Conference at Bretton Woods and was the Australian Executive Director of the IMF/World Bank in the earty 1950s During the 1960s and 1970s he was chairman of the Tariff Board and of the Commonwealth Grants Commission He was appointed Professor of Economics in the University of Adelaide in 1929 and was Vice‐Chancellor of the ANU between 1953 and 1960.
Microeconomic Reform and Employment in the Short Run*
Authors: ADAMS PHILIP D. , PARMENTER BRIAN R.
Published: October 2007

In the long run microeconomic reform will improve living standards by increasing the quantity of goods and services that the economy can produce with its limited productive resources. However, in the short run, reform might lead to a reduction in the usage of productive resources, especially labour, rather than to an increase in output. In this paper we examine the short‐run relationship between micro‐economic reform and employment in Australia using simulations with an applied general equilibrium model