bluuebunny/crossref_metadata_2025 huggingface dataset:
Money, Credit, and Business Fluctuations*
Authors: STIGLITZ JOSEPH E.
Published: October 2007

This paper provides a critique of standard theories of money, in particular those based on money as a medium of exchange. Money is important because of the relationship between money and credit The process of judging credit worthiness, in which banks play a central role, invokes the collection and processing of information. Like many other economic activities involving information, these processes are not well described by means of standard production functions. Changes in economic circumstances can have marked effects on the relevance of previously accumulated information and accordingly on the supply of credit Changes in the availability of credit may have marked effects on the level of economic activity, while changes in real interest rates seem to play a relatively minor role in economic fluctuations.

This alternative view has a number of implications for policy, both at the macroeconomic level (for instance, on the role of monetary policy for stabilization purposes and the choice of targets) and at the microeconomic level.
An Investigation into the Major Causes 01 Australia's Recent Inflation and Some Policy Implications*
Authors: BOEHM ERNST A. , MARTIN VANCE L.
Published: October 2007

This paper investigates the major causes of Australia's recent inflation with special emphasis on the 1970s and early 1980s A general model of inflation is formulated based upon a vector auto‐regression The main empirical finding is that increases in wages and import prices and more recently in money have been significant causal factors of Australia's inflationary experience. Government current expenditure is found to contribute passively to cost‐push inflation
Economies of Scale and Utilization: An Analysis of the Multi‐Plant Generation Costs of the Electricity Commission of New South Wales, 1970/71–1984/85*
Authors: BATESON JEFF , SWAN PETER L.
Published: October 2007

We examine the average costs of electricity generated in NSW at the site level employing a new simultaneous‐equations model approach Further, we argue that costs depend principally on unit size and capacity utilization We reinterpret capacity utilization as a compositional variable which is a continuous proxy for the (inverse of) the intensity of demand for electricity, thus partially addressing the multi‐product nature of electricity. Low capacity utilization corresponds to intense demands and hence peaking output We find that costs per kWh, as conventionally measured, are highly sensitive to the degree of capacity utilization but less so to unit size (scale). The results emphasize the need for tine‐related pricing
Some Effects of Reducing Excess in Infrastructure Charges on the Export Coal Industry*
Authors: FREEBAIRN JOHN W.
Published: October 2007

Excess rail freight and port charges on the Australian export coal industry amount to over 10 per cent of export prices and represent a form of ad valorem tax. Efficiency and distributional effects of removing the excess charges are assessed using a quantitative commodity model and a qualitative general equilibrium assessment. Removal of the excess charge would increase production by 29 per cent by the year 2000, slightly reduce upon prices and generate national efficiency gains of over $150 million a year. The mining industry and the Federal government gain and the State governments lose
Low‐Wage Youth Employment: A Permanent or Transitory State?*
Authors: MILLER PAUL W.
Published: October 2007

One of the striking features of the youth wage distribution in the extent to which an individual's relative position in the distribution changes between contiguous years. Formal modelling of these changes using a bivatiate probit model suggests that low‐wage employment should not, in general be viewed as a permanent state. Individuals in low‐wage jobs in adjacent years are characteried by u lack of human capital Accordingly. remedical action might be directed towards augmenting their skills through supplementary schooling or labour market training.
Australian Macroeconomic Policy Experience*
Authors: CORDEN W.M.
Published: October 2007

This paper looks at Australian macroeconomic experience from approximately 1912 to 1985. The whole period is divided into five episodes. The idea in preparing this paper was to try to answer three questions namely: how did Australian experience differ from that of other OECD countries, what policy lessons could be learnt, and finally, what light could be shed on the relevance of various macroeconomic theories notably rational expectations. In fact. the questions have by no means been adequately answered though the paper goes furthest in dealing with the first question. I hope it will encourage further discussion and research1

Anticipating some of the conclusions, the historical review suggests that Australian experiences have been fairly similar to those of other OECD countries. notably European countries. But the timing has sometimes differed the Australian wages explosions have been (more or less) exceptional and recently Australia has been special in having on incomes policy, It also appears that the theory of rational expectations does not get much support from Australian was behaviour, that policy from 1916 to 1981 was not really monetarist, and that fiscal expansions since 1982 have been made possible by the availability of the international capital market.
The Efficiency of the Market for Bank Accepted Bills*
Authors: KEARNEY COLM , MACDONALD RONALD , HILLIER JOHN
Published: October 2007

The speculative efficiency of the Sydney Futures Exchange's market in bank accepted bills is examined by considering if the futures price is an unbiased predictor of the subsequent spot price and if other publicly available information can improve on this predictor. Data spanning the period 1980(1) to 1986(5) are employed The results are adverse to the efficiency hypothesis in that the futures price in some cases is not an unbiased predictor and neither is it an optimal predictor.
Trade Unions in an Open Economy: A General Equilibrium Analysis*
Authors: BRECHER RICHARD A. , LONG NGO VAN
Published: October 2007

This paper derives a general equilibrium demand‐for‐labour schedule within the Heckscher‐Ohlin‐Samuelson model of a large open economy, and then introduces an economy‐wide labour union that maximizes its utility subject to this demand schedule, thereby determining the real wage and hence total employment A parametric shift's comparative‐static effects on the equilibrium levels of unemployment and welfare are analyzed within this fully unionized economy.
Real Rates of Return in Electricity Supply: New South Wales, Tasmania and Victoria*
Authors: SWAN PETER L.
Published: October 2007

This paper uses a newly developed economic return model to estimate the real (inflation adjusted) costs of supply, and rates of return, for the electricity systems in three States over very long time periods. It is shown that because of a combination of public ownership and the use of historical cost accounts, the real return on capital tends to fall with the onset of rapid inflation such as occurred in the mid 1970s In NSW in particular the rapid growth in demand for electricity in the 1970s due to falling real electricity prices and considerable increases in other energy prices has given rise to a major investment program and rapidly developing excess capacity. Higher real electricity prices in the 1980s, combined with the economic slump of 1982, resulted in low or negative growth rates in demand Much of the boom I bust mentality evident in all three States may have been avoided or ameliorated had the electrical supply authorities been required to earn even a very modest real rate of return of (say) 4 or more per cent p.a. which is considerably below the (pre‐tax) return earned in the corporate sector.
Calibration of Computable General Equilibrium Models from Synthetic Benchmark Equilibrium Data Sets*
Authors: ADAMS PHILIP D. , HIGGS PETER J.
Published: October 2007

The most common procedure for estimating the share parameters of a CGE model is to calibrate the model using a particular year‐of‐record benchmark equilibrium data set. In this paper we argue the case for calibration from synthetic benchmark equilibrium data sets which portray the economy in a notional typical year. The development of a synthetic agricultural sector in the benchmark equilibrium data set of the ORANI model of the Australian economy is described Finally a comparison is made of the results from ORANI of an across‐the‐board tariff cut simulation computed with both the synthetic benchmark equilibrium data set and a particular year‐of‐record data set.
Primary Commodity Prices and the Terms of Trade*
Authors: SAPSFORD DAVID
Published: October 2007

This paper provides a survey of a range of issues involved in the analysis of primary commodity prices and the terms of trade. Particular emphasis is placed upon the long‐run behaviour of the terms of trade between primary commodities and manufactures and the paper presents some new evidence regarding the long‐run behaviour of Australia's terms of trade.
The EPAC ‘Growth Papers’: An Assessment*
Authors: ASPROMOURGOS TONY , WHITE GRAHAM
Published: October 2007

During 1986 the Economic Planning Advisory Council published a series of six papers examining the role of economic policy in fostering long‐term growth. This article provides a review and critical assessment of the EPAC analysis. The fundamental issue at stake is whether long‐term growth is a supply‐driven or a demand‐driven process. In particular, the crucial issue neglected by EPAC is the relationship between aggregate demand, the inducement to invest and the growth of productive capacity. The conclusion is that in order to promote sustained growth, policy must provide the structural and macroeconomic requirements for a sustainable growth of aggregate demand.
Sector Specific Wage Rigidity and Factor Accumulation*
Authors: BELADI HAMID
Published: October 2007

Economic expansion resulting from factor accumulation is introduced in the mobile capital and small open economy version of the Harris‐Todaro model. Among other things, it is shown that economy expansion leads to normal effects on urban unemployment if land is introduced as a scarce input in the agricultural sector. However, capital accumulation and labour growth have indeterminate effects on the absolute level of urban unemployment.
Monetary Targeting: The International Experience*
Authors: ARGY VICTOR , BRENNAN ANTHONY , STEVENS GLENN
Published: October 2007

This paper examines the experience of nine industrial countries with monetary targeting. The paper suggests that monetary targets were adopted as a tactical response to a particular economic situation, not as monetary rules. Other objectives were given precedence over targets when thought desirable. Most countries changed the targeted aggregate, and two dropped targets altogether. While inflation fell in most countries, the extent to which this was due to the pursuit of monetary targets is unclear. The place of monetary aggregates in many countries now appears to be as one among a number of indicators considered by the authorities in the setting of monetary policy.
Optimal Weights in a Check‐List of Monetary Indicators*
Authors: STEMP PETER J.
Published: October 2007

A stylized representation of the check‐list approach to monetary policy is developed. In order to examine this approach in a formal framework the literature on optimal money supply rules is extended with the check‐list being interpreted as an optimal money supply rule that depends on many variables and attempts to keep the economy on a preplanned path despite unexpected shocks. The strengths and weaknesses of the check‐list approach are then examined
The Australian Business Cycle: Its Definition and Existence*
Authors: STRONG SAM , TAN SIEW PING
Published: October 2007

Recent research has suggested that for a number of economies, aggregate output does not behave in a stationary way about a fixed trend Campbell and Mankiw have provided much evidence, and their techniques are adopted here to indicate that Australia's national output has behaved in a way similar to that of other similar economies.
Aids: An Economic Approach to the Choice of Policies*
Authors: LLOYD P.J.
Published: October 2007

This paper presents a novel approach to the difficult problem of society choosing the optimal set of policy instruments to control the spread of AIDS. The economic approach emphasizes the determinants of agents' behaviour and the reciprocal nature of the market failure problem. The nature of the social objective function is discussed and an expected‐utility‐maximizing model of the behaviour of HIV‐infectious agents is developed In the light of the agents' responses to government policies, some general principles relating to the ranking of instruments and their targeting of individual groups and of instrument variables are developed
Long Waves and the Crash of ‘87
Authors: POPE DAVID
Published: October 2007

The crash of 87 spawned considerable interest in economic cycles. This article surveys the literature on long swings of 50 years or so in economic activity. It also explores the conduits through which long swings in production and prices could be carried to share prices, and finally examines the empirical evidence for low frequency cycles in Australia's past and recent economic history.
Decentralization, Competition and the Efficiency of Federalism*
Authors: HAMLIN ALAN P.
Published: October 2007

Arguments for the efficiency of federalism typically depend on a decentralization thesis and a competition thesis, both of which relate to mobility. In this essay I shall review and appraise these two lines of argument I shall suggest that the decentralization thesis is best seen, not as an argument for the efficiency of federalism, but as an efficiency criterion against which models of federalism may be evaluated By contrast, competition and mobility are aspects of the procedural mechanism of federalism which must be supplemented by explicit models of the political process.
The Social Opportunity Cost of Foreign Exchange: A Partial Defence of Harberger et al.*
Authors: FANE GEORGE
Published: October 2007

This paper clarifies the literature on shadow pricing foreign exchange by distinguishing between two different concepts of ‘the social opportunity cost’ of foreign exchange: (a) the increase in utility (divided by the marginal utility of income) due to the availability of an extra dollar of foreign aid receipts; and (b) the maximum amount of some numeraire good which can be used up by the public sector to produce an extra dollar of foreign exchange, without reducing welfare. Both these concepts can be measured by appropriate, but different, versions of the traditional ‘Harberger’ formula The difference disappears entirely under the assumptions which justify partial equilibrium analysis. All these points can be clarified using a single diagram
A Reinterpretation of the CIE Projections of the Long‐Run Economic Effects of Immigration*
Authors: PARMENTER B. R. , PETER MATTHEW W.
Published: October 2007

The 1988 Committee to Advise on Australia's Immigration Policies uses ORANI projections of increasing GDP per head as indicators of the economic benefits of immigration. We show that the projections imply that immigration reduces incumbents' pre‐tax real incomes, leaving their post‐tax incomes unchanged The rise in GDP per head is due to immigrants' relatively high participation rates. We argue that distributional information is important in assessing the effects of immigration.
Market Power and Buffer Stocks
Authors: SIMMONS PHIL , STAHL DALE
Published: October 2007

The first‐order conditions for a monopolist inventory holder are found under more general conditions than previously. It is found that monopolist storers facing inelastic demand will carry over more stock than they would with competition unless the elasticity of demand b increasing as price decreases or is constant. The competitive stocks equilibrium is identified and found to be Pareto optimal and hence Sams' result that there will be no losers from a rent‐maximizing buffer stock policy is shown to be wrong.
Experience Goods, Expectations and Pricing*
Authors: KIM JAE‐CHEOL
Published: October 2007

This paper studies a peculiar problem involved in the pricing of an ‘experience good’ whose value is not known to consumers until it is actually consumed It shows that the producer faces an expectational problem that does not arise in the framework of a ‘search good’. Noticing a link between markets in earlier and later periods due to the expectational problem, the present paper analyzes equilibrium price patterns when a producer can precommit to a certain future price path and when he cannot It also discusses social welfare implications.
Accounting for Australian Carbon Dioxide Emissions*
Authors: COMMON M. S. , SALMA U.
Published: October 2007

This paper provides an accounting for carbon dioxide emissions arising in Australia by final demand deliveries responsible, using input‐output andprimary energy input data for 1982‐83. Commodities are ranked by emissons per unit and total emissions. It is shown how the methodology employed usefully structures analysis of emissions reductions options, and can compute the system wide implications of specific measures in terms of total emissions. It is established that emissions arising in producing for export are approximately the same as emissions attributable to imports.
Union Wage Effects and the Probability of Union Membership*
Authors: CHRISTIE VIRGINIA
Published: October 2007

This paper uses Lee's (1978) model to determine the wage gains associated with trade union membership and the reasons individuals join trade unions in Australia The data are derived from the 1984 Australian National Social Science Survey. A major conclusion is that unions secure a 17.22 per cent wage gain for their members, other things the same. This expected wage premium is shown to have an important positive impact upon the union membership decision. The welfare loss associated with the union wage premium is argued to be relatively minor about one half of one per cent of gross domestic product
Insider Power as a Source of Hysteresis in Unemployment: Tests with Australian Data
Authors: GROENEWOLD NICOLAAS , TAYLOR LEANNE
Published: October 2007

This paper reports the results of an empirical investigation of hysteresis in the unemployment rate using Australian data for 1966(3)‐1988(4). It is found that there is not hysteresis in the strict sense of the irrelevance of the natural unemployment rate although there is strong evidence of insider power in the wage‐fixing process. There is no evidence that the Accord changed the extent of the influence of insider power on wage setting.
Efficient Estimation: The Rao‐Zyskind Condition, Kruskal's Theorem and Ordinary Least Squares*
Authors: McALEER MICHAEL
Published: October 2007

The paper emphasizes the practicability and accessibility of the necessary and sufficient condition for ordinary least squares to yield best linear unbiased estimators in several problems that are available in econometrics Two convenient equivalent alternative forms of the condition are presented It is shown that the condition is useful for analyzing different problems and is especially relevant for pedagogical purposes Several practical economic examples are presented
An Estimated Australian Macroeconomic Misery Index
Authors: LAYTON ALLAN P.
Published: October 2007

The degree of community satisfaction with alternative macroeconomic outcomes is of considerable interest to policy makers. Ad hoc measures of community macroeconomic welfare, so‐called Misery Indexes, are commonly used as proxies of such welfare These indexes are very rudimentary and make implicit restrictive assumptions about the community's marginal rates of substitution among different macroeconomic outcomes. The current paper demonstrates a framework for statistically estimating the relative responsiveness of community welfare to such variables as unemployment, inflation, interest rates, real wages and measures of Australia's external performance. Morgan Gallup Poll data are used to proxy levels of community (dis)satisfaction.
Trade Unions, Collective Voice and Fringe Benefits*
Authors: MILLER PAUL , MULVEY CHARLES
Published: October 2007

The exit/voice model of the labour market predicts that unionized workers will enjoy a greater level of fringe benefits, both absolutely and as a share of total compensation, than non‐unionists. This is because unions can, through the medium of collective voice, communicate to management a picture of the preferences of the median worker. In non‐union settings, however, management responds to the perceived preferences of the young, mobile workers at the hiring margin and these typically place a low priority on fringe benefits relative to money wages. Using data from the A ustralian Longitudinal Survey it is found that the hypothesis is supported by the evidence for Australia.
J.S. Mill and Utopian Socialism*
Authors: KURER OSKAR
Published: October 2007

The majority of Mill interpreters hold that Mill was not a socialist, let alone a committed one. The minority associates Mill with the Utopian Socialists. It is argued here that the minority view is correct. Alleged deviations from the socialist script, such as Mill upholding competition, or him failing to advocate government measures lo support cooperatives, turn out to be in line with other Utopian Socialist writers. Neither is it true that his sympathies were merely platonic, nor was Mill ‘apathetic,’lacking the desire and a concept how to bring about socialism. He did devise a system of policy proposals to transform existing society into Utopia.
Sales Contracts and Production Uncertainty*
Authors: DRAGO ROBERT
Published: October 2007

The paper examines production under common uncertainty where sales contracts specify penalties for under‐ or over‐production. We locate a trade‐off between high productivity and the incurrence of penalties, and identify work incentives appropriate for different cases.
The Contribution of Intermittent Labour Force Participation to the Gender Wage Differential*
Authors: RUMMERY SARAH
Published: October 2007

Despite equal pay decisions in 1969 and 1972 a gender wage differential of around 15 per cent exists in 1990. This paper uses information on the number of years worked from the 1984 National Social Science Survey to provide an understanding of the role of intermittent labour force participation in the wage determination process in Australia. Differences in years worked between males and females are shown to account for approximately 40 per cent of the gender wage gap. The analyses also reveal that males receive higher returns for each additional year of schooling than females
Pricing in Australian Manufacturing*
Authors: BLOCH HARRY
Published: October 2007

The rate of change of prices of competing foreign products and the rate of change of costs of domestic production are both found to have positive impact on the rate of domestic price inflation in a cross section of Australian manufacturing industries over the period from 1968‐69 to 1986‐87. Prices of competing foreign products are found to have more impact, while production costs are found to have less impact, the higher is the level of domestic concentration, supporting the hypothesis that foreign and domestic competition have interactive effects on domestic prices.
The Economics of Television Regulation: A Survey with Application to Australia*
Authors: BROWN ALLAN , CAVE MARTIN
Published: October 2007

The analysis of the regulation of television poses a number of challenges to economists Because the structure and organization of television broadcasting are rarely the same between any two countries, there are difficulties in applying the economic analysis of television regulation in one country to that of another. Further, the major social and cultural role of television causes government broadcasting policy to include many non‐economic objectives This paper outlines the main issues concerning the economic regulation of television and relates the prominent literature in the area to the Australian broadcasting environment
The Tin Crisis (1985‐86) and Futures Trading
Authors: YAMEY BASIL S.
Published: October 2007

A succession of six international tin agreements operated from 1956 to 1985. Futures trading in tin continued in London until the buffer stock scheme, without cash or the support of its sponsoring governments, collapsed in October 1985. The implications of the tin experience for futures trading and for so‐called commodity stabilization schemes are examined
Rational Expectations and Price Determination in the US Oats Market
Authors: GOSS BARRY A. , AVSAR S. GULAY , CHAN SIANG‐CHOO
Published: October 2007

This paper develops a simultaneous rational expectations model of the US oats market Consistent estimates of the structural parameters are obtained by the instrumental variables method and 15 of 16 parameter estimates are significant at the 5 per cent level Estimated elasticities suggest that hedged stocks are more responsive to price changes than unhedged stocks, and that consumption demand for oats is more responsive to income changes than to changes in price. Post‐sample forecasts of the spot price derived from this model are employed to test the semi‐strong form efficient markets hypothesis (EMH), although the futures price outperforms the model as a predictor of the spot price. Hence the EMH cannot be rejected
Information, Pricing and Efficiency in Cash and Futures Markets: The Case of Hogs
Authors: LEUTHOLD RAYMOND M. , GARCIA PHILIP , CHAHERLI NABIL
Published: October 2007

The price leadership roles among hog cash and futures markets are assessed to locate points of price discovery and to examine flows of information among these markets. Several years of data are analyzed using lead/lag causality analysis and strength of linear causality measures. Although significant instantaneous relationships exist among hog cash and futures markets, one‐way causality tests indicate that generally the futures market dominates cash hog markets in the price discovery process.
Price Discovery Processes
Authors: STEIN JEROME L.
Published: October 2007

This paper analyzes two price discovery processes: OLS learning from public information and a Bayesian learning made feasible by futures markets. The former tends to produce cobweb behaviour. In the latter, there is no cobweb, there is a faster convergence to Muth Rational Expectations, and the forecast errors are positively serially correlated The evidence drawn from the Sydney Futures Exchange is consistent with the Bayesian learning process.
Market Dynamics, Programmed Traders and Futures Markets: Beginning the Laboratory Search for a Smoking Gun
Authors: HARRISON GLENN W.
Published: October 2007

Recent events have caused a re‐examination of the role of programmed traders and futures markets in generating destabilizing price movements. Laboratory experiments provide an ideal environment to isolate their effects on behaviour. In a new series of experiments we find that program traders and futures markets can be crucial for ensuring the informational efficiency of the spot market, even when the former are active participants in bubbles and crashes
Single Beta Models and Currency Futures Prices
Authors: McCURDY THOMAS H. , MORGAN IEUAN G.
Published: October 2007

The conditional capital asset pricing model is applied to foreign currency futures prices, covariance risk being measured relative to excess returns from a broadly diversified international portfolio of equities. Positive time‐varying risk premia are found in all five currencies tested when the difference between the US and the average foreign interest rates is used as an instrumental variable for the expected excess return from the common stock portfolio.
Event Studies of Efficiency in the Australian Interest Rate Futures Market
Authors: TAN TING‐YEAN
Published: October 2007

In this paper, the responses of 90‐day Bank Accepted Bill futures prices to the unexpected components in the announcements of money supply, inflation rate and balance of payments are examined Expectations of these variables are generated using VAR and ARIMA models. The unexpected components were extracted by deducting the expected changes from the announced changes. The results show that the efficient market hypothesis cannot be rejected

In this paper, the responses of interest rate futures prices to the unexpected components in the announcement of money supply, inflation rate and balance of payments respectively are examined. Expectations on these economic variables are generated using BVAR, UVAR or ARIMA time‐series econometric models. Empirical results are obtained by regressing the changes in futures price on the unexpected and the expected changes in the economic variables concerned with a constant term using ordinary least squares method.

There are a few points worth mentioning here. First, futures prices did not respond to the expected changes in all the three economic variables announced. This complies to the EMH since all known information has already been incorporated into the price prior to the announcements. Any change in the price immediately after the announcement is due to the new information contained in the unexpected component of the announcement. Second, futures prices did not respond to the unexpected changes in all the three economic variables either. This seems to reject the hypothesis that interest rate futures market is efficient. However, after careful analysis, it is deemed that the EMH cannot be rejected based on the empirical results obtained from the price data which are at least a few hours after the announcements. It is also possible that the new information contained in the announcements is not an important determinant of the futures prices in Australia. The market may simply ignore this information unless it is of significant importance to the future course of the economy. Therefore, the EMH in this case cannot be rejected.
Sex Discrimination and Occupational Segregation in the Australian Labour Market*
Authors: KIDD MICHAEL P.
Published: October 2007

This paper explores the implications of the difference between the occupational distribution for males and females in a joint model determining earnings and occupation. The male/female wage differential is evaluated for a number of broad occupational classifications. This is followed by an evaluation of the role and relative importance of inter‐occupational and intra‐occupational effects as contributors to the overall male/female wage differential The main conclusion following from the econometric results is that intra‐occupational effects dominate Thus, policies which attempt to address the gender wage differential by re‐allocation of labour across occupations are unlikely to solve the problem.
Aspects of Australian and US Living Standards: The Disappointing Decades 1970–1990*
Authors: GREGORY R.G.
Published: October 2007

One theme documents the parallel US and Australian histories of real wages, employment and unemployment since 1950 and notes the break in relativities in the mid 1970s which began with a 30 per cent Australian real wage increase relative to the US. Since then Australian real wages have remained constant, unemployment increased fourfold and the male full‐time employment‐population ratio fallen 25 per cent The other theme relates to the widening dispersion of male real wages, the large job loss from the middle of the earnings distribution and rapid employment growth at low earnings
Evasion Effects of Changing the Tax Mix*
Authors: KESSELMAN JONATHAN R.
Published: October 2007

This study assesses claims that shifting toward greater indirect taxes will reduce evasion, thereby improving the distribution of real net incomes and generating a ‘fiscal dividend’. Practical considerations suggest that industry sectors which evade income taxes will also be strongly inclined to evade indirect taxes on their output. A general equilibrium analysis finds that changing the tax mix will have little or none of the claimed anti–evasion or distributional effects. Increased indirect taxes on evaders' consumption purchases will be shifted onto suppliers in the compliant sector. Evaders will end up evading less income taxes but evading more indirect taxes
Citizen Preference and Public Education in Australia: An Analysis of Interstate Differences*
Authors: SHAPIRO PERRY , PAPADAKIS ELIM
Published: October 2007

In the centrally financed public education system of Australia, interstate differences in per student educational spending have been interpreted as measures of efficiency. An alternative explanation is that the variation reflects differences in citizen preference. An analysis of a survey of citizen opinion demonstrates that, while the relative efficiency explanation cannot be ruled out, it is likely that the variance in per student expenditures is a reflection of the preferences of the citizens of each State. It appears that States come close to satisfying the demands of their median voter.
Australian Stock Market Volatility: 1875–1987*
Authors: KEARNS P. , PAGAN A.R.
Published: October 2007

This paper investigates the volatility of monthly Australian stock returns over the period 1875–1987. There has been extensive work on this question in the United States, but little with data outside that country. Our analysis centres upon whether the ‘stylized facts’ regarding returns in the US also hold true for Australia. We find that there are both similarities and differences. There is little evidence for asymmetry in Australian returns but strong persistence of shocks into volatility. What is particularly interesting in the Australian series is the large volatility of the last two decades, an experience not matched in the US data
Lifetime vs Annual Tax‐Transfer Incidence: How Much Less Progressive?
Authors: HARDING ANN
Published: October 2007

Annual fiscal incidence studies have found that income taxes and cash transfers are highly progressive and that their net effect is to redistribute income from rich to poor. Yet many argue Jhat such studies overstate the redistribution achieved by governments and that lifetime analysis is needed New results suggest that both income taxes and cash transfers are progressive on a lifetime basis, although they are much less progressive than annual studies suggest. The Australian tax‐transfer system thus generates some lifetime redistribution from rich to poor, while also enforcing intra‐personal redistribution across the life cycle of individuals.
Economic Motivations for Limited Dependent and Qualitative Variable Models*
Authors: FRY T.R.L. , BROOKS R.D. , COMLEY BR. , ZHANG J.
Published: October 2007

The greater availability of survey data, a succession of papers dealing with the statistical issues arising from the analysis of such data and the appearance of software packages, such as UMDEP, have led to a remarkable increase in the application of limited dependent and qualitative variable models in economics. Economic analysis of the behaviour of individual decision makers often leads to models which are of a limited dependent or qualitative variable nature. This paper attempts to show how the use of these models naturally arises from the more general framework of modifications to traditional economic optimization problems.
Strategies for Modelling Nonlinear Time‐Series Relationships*
Authors: GRANGER CLIVE W. J.
Published: October 2007

Building models of nonlinear relationships are inherently more difficult than linear ones There are more possibilities, many more parameters and thus more mistakes can be made. It is suggested that a strategy be applied when attempting such modelling involving testing for linearity, considering just a few model types of parsimonious form and then performing post‐sample evaluation of the resulting models compared to a linear one. The strategy proposed is a ‘simple‐to‐general’ one and the application of a heteroskedasticity correction is not recommended
Determinants of International Trade Flows in Travel and Passenger Services*
Authors: MOSHIRIAN FARIBORZ
Published: October 2007

In the past decade there has been a great increase in interest in trade in services. This paper estimates the determinants of trade flows for two service industries, travel and passenger transportation services, for 16 OECD countries Traditional and more recent models of import demand and demand for export functions are utilized The empirical results indicate similarity between trade in goods and trade in services. Price competitiveness is an important factor in determining the trade flows in travel services and like trade in manufactured goods, exchange rate variations have some influence on the volume of travel and passenger transportation services
Immigration and Economic Welfare: Resource and Environmental Aspects*
Authors: CLARKE HARRY R. , NG YEW‐KNANG
Published: October 2007

The relation between immigration and the economic welfare of residents b analyzed for resource‐rich economies (such as Australia) both under competitive conditions and when various distortions are present Immigration provides efficiency gains for residents under distortion–free competition for standard ‘gains from trade’ reasons. Such reasons, however, tend to be ignored by immigration and ‘optimal population’ theorists who raise the issue of restricting immigration without explicitly referring to the distortions. In situations where distortions and externalities are present, we argue that it is generally preferable to devise policies which specifically target the distortions than to restrict immigration.
The Dynamic Effect of Devaluation on the Balance of Payments of a Small Debt‐Ridden Open Economy*
Authors: NGUYEN D. T.
Published: October 2007

This paper derives a precise necessary and sufficient condition for devaluation to eventually improve the balance of payments in domestic currency, using assumptions more appropriate for a small open economy than those of Marshall‐Lerner. It will be shown that, following devaluation, the balance of payments deteriorates over a short period before it gradually improves– the so‐called J‐curve effect The duration of this short period will be shown to depend on the magnitude of trade elasticities, lag‐coefficients, unhedged foreign debt denominated in foreign currency, interest rate and current account deficit
Unionization in Australia: Evidence from the AWIRS*
Authors: WOODEN MARK , BALCHIN JEFFREY
Published: October 2007

This article uses workplace level data from the recent Australian Workplace Industrial Relations Survey to test a simple demand and supply model explaining the level of union membership within Australia The findings suggest that previous research using individual‐level data has understated the importance of the supply‐side in influencing union membership. In particular, unionization levels were found to be highly sensitive to firm size, to the number of unions represented in the workplace and to management attitudes
Longer Run Changes in the Distribution of Income in Australia*
Authors: SAUNDERS PETER
Published: October 2007

This paper brings new evidence to bear on the question of changes in income distribution amongst individuals in Australia between 1942–43and 1989–90. The changes observed over this period are analyzed in the context of previous studies of the changing distribution of income in Australia over the past 80 years. The main conclusions of the paper are that the distribution of individual income in J 989–90is very similar to that estimated for 1942–43, and there is evidence that income inequality has been increasing during the 1980s
The Effects of Reallocating General Revenue Assistance among the Australian States*
Authors: DIXON PETER B. , MADDEN JOHN R. , PETER MATTHEW W.
Published: October 2007

The Australian government distributes about 4 per cent of GDP to the State governments in the form of general revenue assistance. The distribution formula, which favours the less populous States, is a source of resentment in Victoria and NSW. We use two general equilibrium models to analyze the regional employment, output and efficiency effects of proposed changes in the formula
Enterprise Bargaining, Union Structure and Wages*
Authors: DOWRICK STEVE
Published: October 2007

Models of simultaneous bargaining games are used to analyze the wage outcomes associated with various systems of industrial relations, including bargaining by craft, enterprise, industry or the whole economy. Union structure is a key determinant with highest wage pressure occurring when unions are organized along craft lines at industry level Abandonment of centralized bargaining and the splintering of both union and employer organizations into craft and industry units may well lead both to higher aggregate wage pressure and to greater wage inequality.
The Semi‐Strong Efficiency of the Australian Share Market*
Authors: GROENEWOLD NICOLAAS , KANG KUAY CHIN
Published: October 2007

This paper tests the weak and semi‐strong forms of the Efficient‐Markets Hypothesis (EMH) using data on the Australian skate market in the 1980s. The tests are based on aggregate share price indexes and the semi‐strong efficiency tests use macroeconomic data The weak‐form tests examine the autocorrelation structure of share returns and test for unit roots in share prices. The data are found to be consistent with the EMH.
Taxation when Borrowing is Costly*
Authors: QUIGGIN JOHN
Published: October 2007

The implications for taxation theory of a life‐cycle model of consumption incorporating financial transactions costs are derived The equity case for progressive taxation is shown to correspond in a life‐cycle setting, to an efficiency case. Individuals prefer a progressive tax system to a proportional one because the tax burden is lower when they are young and face high transactions costs of borrowing. Similarly, an income tax is preferred to a consumption tax. Unlike earlier models based on liquidity constraints, the model presented here involves a financial sector consuming real resources. This permits analysis of the tax treatment of financial services in a consumption tax system. Exemption of financial services will generally be desirable.
Employment and Length of the Working Week in a Unionized Economy in which Hours of Work Influence Productivity*
Authors: BOOTH ALISON , RAVALLION MARTIN
Published: October 2007

Conditions are derived for signing the employment effects in a unionized economy of a legislated cut in hours when productivity depends on the number of hours worked each week. Aggregate data suggest that employment will generally increase after a small cut in hours for the UK but the employment effect is ambiguous for Australia. Disaggregated data for Australia suggest that the employment effect of a cut in hours is often positive However, any cut in hours imposed on a monopoly union, without a cut in pay, will unambiguously lead to a drop in employment
Further on the Nature of the Australian Business Cycle
Authors: LAYTON ALLAN P.
Published: October 2007

Strong and Tan (1991) found Australian output variation was well characterized by a stochastic trend implying output shocks have a permanent effect on the level of activity. The paper finds that in Australia the stochastic trend alternative is statistically dominated when the data are allowed to be characterized by a probabilistic segmented trend specification. This finding implies shocks will only have a permanent effect on output when the series' growth path switches from one growth regime into another as a result of the shock.
Key Features of New Zealand Business Cycles*
Authors: KIM KUNHONG , BUCKLE A. , HALL V. B.
Published: October 2007

By international standards, New Zealand's recent business cycle fluctuations have been exceptionally volatile. Fluctuations in central government and private fixed investment expenditure, the real net exports share, the terms of trade and interest rates have also been particularly volatile. Many bivariate relationships change markedly over time, but ‘real variable regularity’ is confirmed. Fluctuations in government purchases have been acyclical. The real net exports share has been countercyclical overall, but pro‐cyclical most recently. Domestic price fluctuations have been basically countercyclical. The scale of changes over the past decade continues to present difficulties for establishing credible financial and open economy regularities.
Public Capital and Private Sector Productivity*
Authors: OTTO GLENN , VOSS GRAHAM M.
Published: October 2007

The role of public services in private production is quantified for the Australian economy over the period 1966/67–1989/90. Public capital is shown to have a significant and positive impact on private production and private total factor productivity. The extent to which these results can contribute towards the debate about appropriate levels of public investment is also considered.
Government Purchases and Relative Prices in a Two‐Country World*
Authors: OSTRY JONATHAN D.
Published: October 2007

The effects of government expenditures on the terms of trade, the real exchange rate, and the real interest rate are examined in a three‐goods (importables, exportables, and nontradables), two‐country, inter‐temporal, optimizing model. Temporary spending increases on tradable or nontradable goods may raise or lower the world return on internationally traded bonds and may improve or worsen the current account of the country undertaking the fiscal expansion. The paper's results also shed light on the theoretical determinants of the co‐movement between the terms of trade and the real exchange rate in response to changes in fiscal policies.
Comparing Like with Like in Productivity Studies: Apples, Oranges and Electricity*
Authors: ZEITSCH JOHN , LAWRENCE DENIS , SALERIAN JOHN
Published: October 2007

A methodology is developed to incorporate operating environment variables in the measurement of Total Factor Productivity. When no account is taken of operating environments, the Queensland Electricity Supply Industry (QES1) was found to be 13 per cent more productive than the New South Wales Electricity Supply Industry (NSWES1). However, when performance is adjusted for the relatively large area serviced by the QESI, the productivity advantage it has over the NSWESI expands to about 20 per cent.
‘Shall Become Exclusive:’ An Economic Analysis of Section 90*
Authors: SHAPIRO PERRY , PETCHEY JEFFREY
Published: October 2007

Section 90 of the Constitution gave the power to impose excise duties exclusively to the Commonwealth. Sometimes it is argued that the Founders were motivated by a concern to ensure free interstate trade. We show that Section 90 may have reduced interstate trade distortions but equally it may have increased them and created a large excise revenue surplus for the Commonwealth. There is, therefore, a case for giving excise tax powers back to the States and allowing them to cooperate through an interstate compact. There may be a role for the Commonwealth in monitoring and enforcing such a compact.
The Australian Undergraduate Economics Degree: Results from a Survey of Students*
Authors: SIEGFRIED JOHN J. , ROUND DAVID K.
Published: October 2007

This article reports the results of a large survey of Australian undergraduate economics students. The students were queried about their socio‐demographic characteristics, reasons for selecting a university economics degree, university experience in learning economics, assessment of their university economics programs, and future education and career plans. They also assigned themselves expected grades on hypothetical examination questions in microeconomics, macroeconomics, and economic statistics. The students rated their lectures and the rigour of their curriculum as the strengths of their degree. They were most disappointed about their training in writing essays, the course advising they received, and their instruction in problem solving.