bluuebunny/crossref_metadata_2025 huggingface dataset:
On Monetary Expansion, Terms of Trade and Economic Growth*
Authors: SHIEH YEUNG‐NAN
Published: October 2007

In a recent paper Roberts (1978) has extended Ramanathan's model (1975) to a two‐sector, two‐currency and two‐country neoclassical growth model with flexible exchange rates. Under the assumption that the consumption good is relatively capital intensive, Roberts obtains two important propositions: an increase in domestic monetary expansion will increase the domestic overall capital intensity, decrease the foreign overall capital intensity, and worsen the terms of trade for the country importing the investment good; an increase in domestic monetary expansion may increase or decrease the level of trade. In this paper, we add to and generalize these results by using a simple yet thorough comparative statics analysis without the factor intensity condition.1It will be seen that the complexity and ambiguity of Roberts' results are substantially reduced.
Mineral Leasing Policy: Competitive Bidding and the Resource Rent Tax Given Various Responses to Risk*
Authors: EMERSON CRAIG , GARNAUT ROSS
Published: October 2007

This paper considers the choice between lump‐sum bidding and a tax conditional on net present value (of which the Resource Rent Tax is a practical example) as methods of collecting rent from mining projects. It demonstrates that there is an optimal combination of the two methods and that the relative emphasis to be placed on each depends heavily on the manner in which investors take risk into account. Four stylized ways in which investors and governments respond to risk are examined and, in addition to the more familiar types of risk, sovereign risk is introduced. The paper argues for the placing of relatively heavy emphasis on the conditional tax.
An Australian Housing Model*
Authors: WILLIAMS ROSS A.
Published: October 2007

A 13‐equation model is developed which captures the essential economic features of the housing industry in Australia. The importance of speculative builders and investors is recognized. Empirical results are presented for two key equations. The asset price of existing dwellings (including land) owned by persons is explained by a portfolio choice or generalized asset adjustment model. This asset price then feeds in as a determinant of new private construction, along with construction costs of new dwellings, financial variables and a measure of demand‐supply imbalance.
The Enforcement of Income Tax Laws: Efficiency Implications*
Authors: BALDRY J. C.
Published: October 2007

Complete enforcement of income tax laws, designed to reduce income tax evasion to zero, is shown to be inefficient. Starting from a ‘full compliance’ policy, it is shown that a marginal reduction in enforcement will always allow for tax reductions, hence increases in the ex‐ante utility levels of taxpayers. Only if the tax structure is rigid can full compliance be optimal.
Taxation and Life Insurance: A Theoretical Analysis*
Authors: HARPER IAN R.
Published: October 2007

Taxation of life insurance is generally considered to pose special and complex problems. These are alleged to stem from the special nature of life insurance. This paper challenges the notion that there is anything inherently special about the economics of life insurance and disputes the claim that it warrants special tax treatment. A model of the life insurance firm is presented and the appropriate basis for taxing life insurance companies and their policyholders is derived. This is compared with the system of taxation currently operating in Australia.
Is There a Macroeconomic World of One Simple Model?: Reply*
Authors: NORTON W. E. , McDONALD ROBIN
Published: October 2007

Two questions arise from the note by Hughes: is there a choice for policy in the short term between more production and less inflation and can special factors, such as institutional arrangements for the fixing of wages, have an influence on outcomes for inflation? We will take these questions in turn.
Issues in the Hidden Economy—A Survey*
Authors: CARTER MICHAEL
Published: October 2007

This paper discusses a number of questions concerning the so‐called hidden economy. What is the hidden economy? How big is it? Is it really growing? Does it matter? What should we do about it? The paper is not an exhaustive survey of the literature on the hidden economy. Its objective is more modest ‐ namely to present an overview of the state of research, identify the major themes and issues and provide a framework for further work.
Money Wages, Consumer Prices, and Causality in Australia*
Authors: BOEHM E. A.
Published: October 2007

This paper exploits recently developed statistical techniques to examine the causal patterns in lag relationships between changes in wages and consumer prices. The analysis uses quarterly data for selected periods and a total historical sample period 1954‐82. Causation has generally been unidirectional from wages to prices. However, for the first half of the 1970s bidirectional causation was detected, though the causation from wages to prices was statistically more significant. Brief consideration is given to some policy implications of the results.
The Distribution of Wealth in Australia — A Survey*
Authors: PIGGOTT JOHN
Published: October 2007

This paper surveys and analyzes the available evidence on the distribution of wealth in Australia. On the basis of this evidence, it is argued that the cross‐section distribution of personal wealth reveals considerable concentration in the top tail, with the top 1 per cent of adult individuals holding around 25 per cent of private wealth. The inequality of wealth revealed in the cross‐section distribution among the top 10 per cent of wealth holders is not significantly reduced when adjustments are made to correct for life‐cycle influences. Although the proportion of wealth held by the top 1 per cent of adult individuals has decreased sharply since World War I, the second to tenth percentiles have almost the same proportion in the 1960s and 1970s as in 1915.
Political Economy*
Authors: ARNDT H. W.
Published: October 2007

The term ‘political economy’ has a long and curious history, from its 17th‐century meaning of statecraft to the classical economists' use of it for what later came to be called economics and its recent appropriation by neo‐Marxists for social theory which, in contrast to ‘orthodox’ economics, goes into history, politics and sociology, focuses on power relationships and combines positive analysis with advocacy. This article points out that there are now at least two schools of political economy in this tatter sense, the neo‐Marxist and the ‘Chicago’ school. The concluding section distinguishes sensible and not so sensible uses of the term.
Anti‐Stagflationary Tax Cuts and the Problem of Investment*
Authors: McDONALD IAN M.
Published: October 2007

If prices are affected by both cost‐push and demand‐pull factors then a change in the policy mix towards fiscal ease can improve output, employment and the balance of trade without the price level rising. However the policy change may reduce investment and so affect the intertemporal allocation of resources. This paper derives conditions for tax cuts to ameliorate inflation and unemployment without a sacrifice of future output. Numerical examples suggest that one can have no presumption that the conditions are or are not likely to hold in general. The discussion is related to Corden's recent analysis of a ‘free lunch’.
Volume Quotas with Heterogeneous Product Categories*
Authors: GIBBS I. , KONOVALOV V.
Published: October 2007

Volume quotas on imports are an important part of assistance packages afforded a number of major industries in Australia. Generally, quota is allocated to importers free of charge, although recently a proportion of quota for some product groups has been sold by tender. In this paper we compare the effects of volume quotas applied to heterogeneous product groups when allocated free of charge, by full tender sale and by a combination offender sale and free allocation. The analysis is undertaken for both competitive markets and in the case where importers have some market power.
The Marginal Costs of Electricity Supply in Victoria*
Authors: HARTLEY PETER , TRENGOVE CHRIS
Published: October 2007

This paper discusses some of the determinants of the costs of supplying electricity by season, by time of day and by location. A model is constructed of the State Electricity Commission of Victoria grid to illustrate the propositions. It is found that current tariffs bear little relationship to the opportunity costs of supplying electricity.
The Impact of Traded Goods Prices on the New Zealand Economy*
Authors: WELLS GRAEME , EVANS LEWIS
Published: October 2007

Recent empirical work in Australia and New Zealand reveals a diversity of estimates of the dynamic response to changes in traded goods prices. Similarly, there is conflicting evidence as to whether relative purchasing power parity is a characteristic of models estimated from data. In this paper it is argued that a reduced form approach to empirical modelling is appropriate for New Zealand's particular circumstances. The resulting model is simulated in a novel way, with results that argue against the use of a simple traded/non‐traded goods distinction in the analysis of foreign price impacts on New Zealand. Purchasing power parity is, however, consistent with the results.
Interest Parity, Monetary Policy and the Volatility of Australian Short‐Term Interest Rates: 1978–1982*
Authors: SHARPE IAN G.
Published: October 2007

The period since the introduction of the Treasury note tender in December 1979 has been characterized by increased variability of Australian short‐term interest rates. Using a methodology suggested by Evans, the increase in variability of the 90‐day commercial bill rate is decomposed into that attributable to domestic monetary policy, seasonal influences, covered international interest rate movements and other miscellaneous influences. The results suggest that after December 1979 Australian short‐term interest rates became more sensitive to surprises in the domestic monetary base, covered Eurodollar rate surprises and seasonal influences. Increased volatility of the covered Eurodollar rate also contributed to increased variance of domestic rates.
Economic Progress in Australia: An Analysis of Occupational Mobility*
Authors: MILLER PAUL W. , VOLKER PAUL A.
Published: October 2007

Educational attainment and gender are firmly established in the labour economics literature as key determinants of an individual's economic standing at a given point in time. The concern of the present paper is to determine the impact of these characteristics on economic progress over time. A multinomial logit approach to estimating occupational attainment at various career points is employed. The use of this method of analysis in conjunction with the intertemporal linking of occupations enables us to provide a number of important insights into economic progress in the Australian labour market. Additional years of education are shown to increase the probability of employment in better jobs at the time of labour market entry and also to enhance career mobility. Analysis of male‐female differences highlights the sizeable gap between the occupational distributions of these groups. Part of this difference may reflect inequality of opportunity between males and females in the Australian labour market.
An Application of the Hedonic Price Model to the Perth Residential Land Market*
Authors: BARNETT COLIN J.
Published: October 2007

This paper presents the results of an application of the Rosen‐Freeman hedonic price model to the Perth (Western Australia) residential land market. A sample of over two thousand market transactions is used to estimate the value of residential land attributes. Major emphasis is given to those particular land attributes that are subject to public regulation and to the policy implications that follow.
Debt, Credit and Monetary Targeting in Australia*
Authors: HORNE JOCELYN , MONADJEMI MEHDI
Published: October 2007

The purpose of this paper is to examine the case for debt targeting in Australia. This issue has recently attracted considerable policy interest, especially in the US, in view of the acceleration and diffusion of new financial products and processes which have tended to undermine the existing monetary aggregates. A series for broad credit (defined as outstanding indebtedness of all non‐financial sectors) is constructed and its behaviour and that of its components is discussed and analyzed. A variety of empirical techniques based upon the predictability criterion are employed to show that, unlike the US, no case can be made to support the use of broad credit as an intermediate target in Australia. Bank credit and M3 are found to perform reasonably well as intermediate targets.
Immigrant Generation and Income in Australia*
Authors: MILLER PAUL W. , CHISWICK BARRY R.
Published: October 2007

Microdata for adult men from the 1981 Australian Census are used to study the determinants of income by immigrant generation. The overseas born, 30 per cent of adult males, have 5 per cent lower incomes than the native born, and ceteris paribus, 7 per cent lower incomes. Schooling and pre‐immigration labour market experience have smaller effects for the overseas born. Among the Australian born, those with overseas‐born parents have 4 per cent higher incomes overall, but, ceteris paribus, there is no difference. The means and partial effects of the explanatory variables among the native born are not related to the parents' nativity.
Immigration and Unemployment*
Authors: WITHERS GLENN , POPE DAVID
Published: October 2007

The wisdom of maintaining high levels of immigration into Australia has been questioned, particularly on the grounds that migration contributes to aggregate unemployment. This paper uses both statistical causality techniques and conventional structural models to investigate the relationship between immigration and unemployment in the post‐war period in Australia. The tests find no evidence of any association from migration to unemployment, though there is strong evidence of a significant effect of Australian unemployment on migration. The results indicate that immigration policy should not be dictated by unfounded fears of immigration causing unemployment, at least over the range of previous Australian experience.
‘A Fair Suck of the Sauce Bottle’ or What Do You Mean by Inequality?*
Authors: COWELL F. A.
Published: October 2007

The literature on the economics of inequality conventionally uses the utilitarian social welfare function as a tool for comparing income distributions. This approach usually suppresses the distinction between two types of ‘inequality aversion’. The formal analysis of these two types is examined and the results of an informal survey are reported.
The Economic Determinants of Private Schooling in Australia*
Authors: WILLIAMS ROSS A.
Published: October 2007

The demand for private schooling is particularly dependent on the relationship between fees charged and services provided. This relationship in turn depends upon the extent of government funding of private schools, the level of teachers' salaries and the value of contributed services. This paper documents movements in these and other variables and examines the extent to which they explain the shift of enrolments to private schools.
Inter‐Fuel and Inter‐Factor Substitution in NSW Manufacturing Industry*
Authors: TRUONG TRUONG P.
Published: October 2007

This paper uses the absolute price version of the Rotterdam model to investigate inter‐factor (energy, labour, capital, material), and the inter‐fuel (electricity, solid fuel, liquid fuel, gas, other fuel) substitution in NSW manufacturing during the period 1968‐69 to 1980‐81. Input demand elasticities with respect to input prices and production volume are derived, analyzed and compared with results from previous studies. While generally previous results are confirmed, some divergencies do occur. These are attributed to choice of time period and region.
Soft Science*
Authors: BLANDY RICHARD
Published: October 2007

The rhetorical nature of understanding in the social sciences is described — a mode of understanding fitting comfortably with sciences such as paleontology, archeology and meteorology. The search for unique, value‐free truths is inappropriate as an epistemology. The pursuit of value‐freedom has been a major handicap in understanding social dynamics. Value‐freedom also rubs off on inferior dynamic performance. More positive images of futures are needed.
The Sources of Changes in the Occupational Segregation of Australian Women*
Authors: LEWIS DONALD E.
Published: October 2007

Earlier studies have shown that Australian women are concentrated in a narrow range of occupations and that although occupational segregation has declined during the 20th century, the rate of decline is diminishing. This study uses census data from 1891 to 1981 to analyze the sources of changes in the Duncan and Duncan segregational index. It distinguishes changes in the index due to shifts in the occupational mix of the economy, and shifts in the sex composition within specific occupations. Both effects contributed to the general decline in segregation although the composition effect was quantitatively more important.
Hedonic Analysis in a Spatial Context: Theoretical Problems in Valuing Location‐Specific Amenities*
Authors: GRAVES PHILIP E. , KNAPP THOMAS A.
Published: October 2007

Hedonic analysis is frequently implemented to generate implicit prices for location‐specific amenities within single markets, either in cross‐city wage differentials or in intra‐city rent gradients. Amenities are shown to be generally priced in both land and labour markets, with single‐market valuations tending to understate true amenity values. Establishing a correct multi‐market amenity valuation model is seen to depend on the resolution of a host of additional issues.
Privatization Policies and Public Enterprise: A Survey*
Authors: DOMBERGER SIMON , PIGGOTT JOHN
Published: October 2007

This paper surveys and analyzes the economic literature on ‘privatization’ policies, restricting coverage to policies designed to improve the operating efficiency of public sector enterprises through increased exposure to competitive market forces. These include asset sales, liberalization (or deregulation) and franchising. The objectives, incentives and constraints of public and private enterprises are examined, and evidence on their comparative performance is analyzed. Public sector revenue effects from asset sale are also explored. On the basis of these considerations, the paper concludes that liberalization is an important ingredient in any policy package designed to improve the operating efficiency of public sector enterprises. Asset sale may enhance the beneficial impact of deregulation but asset sale in the absence of deregulation is unlikely to improve efficiency, and may introduce additional market distortions. Franchising is seen as an appropriate mechanism for privatization when the market is inherently monopolistic and when the government desires to retain control over output and/or price.
How Bad is Australia's Economic Performance and Why?*
Authors: GRUEN F.H.
Published: October 2007

While public concern about Australia's relatively poor growth performance is recent, our performance has been poor for a long time. Practically the whole of our slide down the income‐per‐head totem pole occurred before 1973. The paper advances the argument that ‘made to measure’ protection and widespread restrictive trade practices used to be one of the main factors retarding faster growth in Australia before the seventies, though deteriorating terms of trade have also been important. The profit squeeze resulting from real wage inflexibility during the seventies has probably played an important role since then. There is no evidence to support the contention that our poor growth is the result of the expansion of the public sector.
The Effects of Delays on the Stability and Rate of Convergence to Equilibrium of Oligopolies*
Authors: RUSSELL ALLEN M. , RICKARD JOHN A. , HOWROYD T.D.
Published: October 2007

The stability of oligopolies is investigated using the Cournot strategy and a general output adjustment procedure. Information delays are incorporated in the adjustment procedure and their specific effects upon the dynamic stability of oligopolies is investigated. The stability of equilibrium for discrete models is unaffected by information delays and remoteness of planning horizons; however the rate of convergence to equilibrium may be slowed. For continuous models with delays, some restraints are required for stability.
Margins, Concentration and Oligopolistic Interdependence*
Authors: DIXON ROBERT , GUNTHER ALAN
Published: October 2007

In this paper we examine the relationship between margins, elasticities of demand and the Hirschman‐Herfindahl index of concentration for Australian manufacturing. Our main aim is to estimate the degree of collusion in various manufacturing sectors in the years 1968‐69, 1972‐73 and 1977‐78. There appear to be marked differences in the apparent degree of collusion between industries. It is argued that once sub‐optimization is allowed the Cowling‐Waterson model will yield biased estimates of the degree of collusion.
Optimal Taxation of International Income Flows*
Authors: FINDLAY CHRISTOPHER C.
Published: October 2007

Double taxation of international income flows has been regarded as undesirable and international tax agreements have been negotiated to avoid it. The questions asked are whether double taxation is appropriate and whether cooperation is required to reach the optimal solution. The results are that generally some double taxation is desirable, as long as taxes are applied at the appropriate rates, and that an efficient solution can be attained in the absence of explicit cooperation using a deduction rule, instead of the now commonly used credit rule. A rationale for the current system of tax agreements and their emphasis of the credit rule is discussed.
A Comparison of Alternative Exchange Rate Forecasting Models*
Authors: HOGAN LINDSAY I.
Published: October 2007

This paper compares a number of structural and times‐series models on the basis of their accuracy in forecasting the A ustralian‐US dollar exchange rate out of sample. Purchasing power parity, forward exchange theory, static and dynamic specifications of both the flexible price and sticky price monetary models, and univariate ARIMA models are considered in the paper. Exchange rate forecasts are generated at horizons of one to four quarters. In contrast to overseas results which support the view that the exchange rate follows a random walk, several models in this study are found to generate forecasts superior to the random walk model.
Benefits of Changes in Urban Public Transport Subsidies in the Major Australian Cities*
Authors: DODGSON J. S.
Published: October 2007

This paper considers the economic efficiency benefits of urban public transport subsidies and presents estimates of the marginal benefits of fare and service level changes in the main Australian cities. Models to evaluate benefits are outlined, and estimates compared of the benefits to public transport and other road users of fare and service level changes in different cities. A major conclusion is that existing urban public transport subsidies might be more effective from an economic efficiency point of view if frequency levels were reduced and the consequent cost savings used to finance lower levels of fares.
Wage Adjustments and Labour Market Systems: A Cross‐Country Analysis*
Authors: WITHERS G. , PITMAN D. , WHITTINGHAM B.
Published: October 2007

Evidence is presented on how well alternative systems of wage determination facilitate disaggregate labour market adjustment. Tests of statistical causality are used to relate labour market pressure to relative wage changes. The conclusion is that rates of change of relative wages are determined independently of the microeconomic market balance. This result holds irrespective of the institutional form of the wage‐fixing system.
Analyzing Income Distribution in Australia*
Authors: MEAGHER G. A. , DIXON PETER B.
Published: October 2007

This paper contains an analysis of the sources of income inequality in Australia, based on data from the ABS income survey for 1978‐79. The analysis proceeds by progressive decomposition of the population into component groups differentiated by characteristics such as sex, age, employment status and occupation. At each stage of the decomposition, total inequality is partitioned into contributions from within and between the component groups, as measured by the Shorrocks Iq index. The importance of the characteristic in question as a source of inequality can then be assessed. While the results of the analysis are described in some detail, the emphasis of the paper is primarily methodological.
Australian Business Investment: A New Look at the Neoclassical Approach*
Authors: KOHLI ULRICH , RYAN CHRISTOPHER J.
Published: October 2007

This paper attempts to reconcile neoclassical theory with Australian investment data. We argue that, by focusing almost exclusively on the demand for capital services, neoclassical investment theory neglects two related decisions: the decision to own the existing capital stock, and the decision to produce new capital goods. We propose a simple model of investment behaviour that integrates production decisions with portfolio decisions. Careful consideration is given to the determination of the price of capital, the rental price of capital, and the return on capital. The model is estimated by FIML, and a number of simulation results are reported.
Do Incomes Policies Restrain Wage Inflation? Some Evidence From Australia, Canada, and the United States*
Authors: ZAIDI MAHMOOD A.
Published: October 2007

The purpose of this paper is to reassess the impact of incomes policies on wages in Australia, Canada and the United States. These countries differ in institutional arrangements as well as in the form and timing of incomes policies adopted. Three methods of assessing the effect of incomes policies have been used: the simulation approach, the intercept‐shift dummy variable approach, and the rotation approach. The results indicate that incomes policies exhibited considerable diversity in the effectiveness among the three countries. The results also show a consistent restraining influence of labour market variables on wage inflation.
Who Pays for Protection in Australia?*
Authors: CHOI KWANG‐HO , CUMMING TRACEY A.
Published: October 2007

A simple model is used to measure the transfer effects resulting from protection in Australia. The model is not concerned with the deadweight losses associated with protection. The concept of ‘true’ protection is employed to construct a transfer matrix which shows how income is transferred between sectors. The results indicate that exporters are the sole losers from protection. The cost to Australian exporters is about 1.5 per cent of GDP.
Portfolio Theory and Foreign Investment ? The Role of Non‐Marketed Assets
Authors: HARTLEY PETER
Published: October 2007

Far from thinking the extent of foreign investment in Australia is large, economists ought perhaps be surprised that the extent is not greater. Certainly, portfolio diversification theory would seem to predict Australians would own a small share of their marketable wealth in Australian marketed assets. We show that when domestic residents in a small open economy possess non‐marketable wealth (so that securities markets are not complete), domestic marketed assets may be disproportionately demanded by residents to hedge their non‐marketed risks.
The Probability of Leaving Unemployment: The Influence of Duration, Destination and Demographics*
Authors: BROOKS CLIVE , VOLKER PAUL
Published: October 2007

This paper examines the influences of a number of demographic characteristics and the duration of unemployment on the probability of leaving unemployment. This probability is found to decrease as the duration of unemployment increases, with married females having the highest probability of exit. Various measures of average completed duration suggest that the longest spells of unemployment are incurred by older males. These appear to be longest for males withdrawing from the labour market. The relationship between the duration of unemployment and the probability of exit is important for labour market policy. Some relevant considerations are also explored in the paper.
Economic Relations Between ASEAN and Australia*
Authors: ARIFF MOHAMED , HILL HAL , GARNAUT ROSS , FONG PANG ENG.
Published: October 2007

Economic relations between the countries of ASEAN and Australia have developed rapidly in the past 25 years. All countries in the region share a powerful interest in the maintenance of a liberal international trading environment. There is also confineable scope for an expanded. mutually beneficial bilateral relationship if a range of barriers to commercial contact are removed. Public policy reforms, on a non‐discriminatory basis are the key to such a relationship.
Egoistic Rationality and Public Choice: A Critical Review of Theory and Evidence*
Authors: QUIGGIN JOHN
Published: October 2007

Over the past 20 years there has been a rapid development of public‐choice theory: that is, the application of an assumption of egoistic utility maximization to political behaviour. In this paper it is argued that, in important areas, the available empirical evidence runs counter to this theory. The continuing work in this area therefore reflects ideological, rather than explanatory or predictive, concerns.
Rational Actor Theory in Politics: A Critical Review of John Quiggin*
Authors: BRENNAN GEOFFREY , PINCUS JONATHAN
Published: October 2007

John Quiggin's paper attacks public‐choice theory. among other things, for its us? of the assumption of ‘rational egoism’. The object of our response is twofold. First. to distinguish egoism from rationality, and to indicate that rationality postulates, when faithfully applied, provide reasons for believing that political behaviour and market behaviour will be systematically different, and specifically that the former will be less egoistic than the latter. Second, to indicate that comparative static propasitions in public‐choice theory (and in economics more generally) can be sustained on rather weaker behavioural assumptions than homo economicus embodies, and that consequently some of the public‐choice orthodoxy would survive any attack on the egoism assumption.
How Reliable are ORANI Conclusions?*
Authors: PAGAN A. R. , SHANNON J. H.
Published: October 2007

This paper seeks to systematically review the main criticisms of the ORANI model by developing a graphical version of a two‐sector (exportables and nonexportables) miniature ORANI model. This model shows that ORANI results occur because while supply curves in both sectors have similar slopes. the slopes of the demand curves are polar opposites. Furthermore this model shows that results will tend to be more sensitive to variations in supply rather than demand parameters. Experiments using the ORANI model itself verified these findings. These results indicate that some form of sensitivity analysis with respect to assigned parameter values should form an integral part of any ORANI experiment.
An Empirical Analysis of Australian Strike Activity: Estimating the Industrial Relations Effect of the First Three Years of the Prices and Incomes Accord*
Authors: BEGGS JOHN J. , CHAPMAN BRUCE J.
Published: October 2007

Australian strike activity war relatively low in the 1983(2)‐1986(1) period. Some part of this experience is attributable to changes in the macroeconomic environment and some is a consequence of improvements in industrial relations. This paper attempts to determine the role of each by estimating econometric models for the 1959(3)‐1983(1) period and forecasting indicators of strike activity over the subsequent three years. We find that working days lost per unionist decreased because of macroeconomic conditions, but that these variables explain less than half of the actual decline. This suggests that, for the initial three‐year period of its institution, the Accord helped deliver a favorable industrial relations environment, a situation that is not necessarily long‐lasting. More generally, the results show strike activity to be pro‐cyclical and influenced by profits and inflation.
The Nation's Private Wealth ‐Some New Calculations for Australia*
Authors: PIGGOTT JOHN
Published: October 2007

This paper has two related purposes. The first is to bring together and review a number of earlier studies which have attempted to estimate the value of Australia's privately held wealth stock. The second is to present new estimates covering the 1980s. based partly on these earlier studies, which value all major components of the nation's private wealth at their market value, or a close approximation. The calculations reported here represent the first aggregate Australian wealth series for which comprehensive market valuation can be claimed.

Australia's aggregate non‐human private wealth was found to be $794 billion at 30 June 1985. The series as a whole suggests that previous estimates have significantly under‐valued Australia's wealth. At 30 June 1981 the Helliwell‐Boxall (1978) study. updated by the Reserve Bank, reported a value of $294.7 billion, while Williams (1983) gave a value of $360.5 billion. The corresponding estimate for the new series is $532.5 billion. Because the new calculations presented here value wealth by component. it is possible to identify omissions and valuation differences which account for most of the variation between these estimates.
Determinants of the Labour Force Status of the Aged*
Authors: WOODLAND A. D.
Published: October 2007

The determinants of the labour force status of the aged are investigated using surveys of individuals undertaken in Sydney, Adelaide and Melbourne during 1981. The explanatory variables used in the probability models of the labour force status comprise both socio‐demographic and economic variables. The economic variables include wealth proxies. pension eligibility, and the wage rate. The economic variables were shown to be very important determinants of the labour force status of the aged. This is particularly true of the variables relating to eligibility for the age pension.
A Note on Causality Between Money, Wages and Prices in Australia*
Authors: ALSTON JULIAN M. , CHALFANT JAMES A.
Published: October 2007

Lead and lag relationships between money, wages. and prices are examined using Australian data. Granger causality tests support univariate causality running from money to both wages and prices. This result is consistent with a monetarist explanation of inflation.
Wage Determination In Australia*
Authors: SIMES R.M. , RICHARDSON C.J.
Published: October 2007

This paper examines whether a stable expectations‐augmented Phillips curve exists for Australia. High real wages in the face of continuing high unemployment over the past decade have led to suggestions that the level of unemployment has little effect on wage determination, with the bargaining process taking place between employers and those employees in ‘secure employment’. Results from aggregate data suggest that the level of unemployment is relevant to wage determination. In addition, the impact of overtime on the growth in money wages is consistent with the view that those in secure employment are influenced by labour market conditions.
The Impact of Incomes Policy on Aggregate Wage Determination in Australia*
Authors: LEWIS PHILIP E.T. , KIRBY MICHAEL G.
Published: October 2007

A model of aggregate wage determination for Australia is developed and used to examine the effects of incomes policies on the level of real wages. A theoretical model of wage determination which includes several channels of incomes policy effects is specified and estimated using aggregate data. The results provide strong evidence to support the view that during periods of certain incomes policies there have been important changes in behaviour in the Australian labour market. In particular, during the period of the Prices and Incomes Accord it is estimated that equilibrium real wages were over 5 per cent below what would have been expected from previous experience.
Industry Inefficiency, Monopoly and Import Liberalization in New Zealand — An Assessment of the Static Welfare Effects*
Authors: PICKFORD M.
Published: October 2007

A monopoly industry trade model embodying various assumptions is used to estimate the static, partial, welfare effects of the New Zealand import liberalization policy introduced in 1984. Import licences for products competitive with domestic manufactures are being expanded, causing tendered premiums to fall until tariffs assume the protective role. The resulting price falls are estimated to produce an aggregate welfare gain of 0.28 per cent of GDP, and to generate large distributional effects.
The Youth Labour Market in Australia*
Authors: MILLER PAUL , VOLKER PAUL
Published: October 2007

This paper uses unit record data from the 1985 Australian Longitudinal Survey to review the major features of the youth labour market. It is shown that education plays an important role in determining the incidence of unemployment, wages, hours of work and access to training opportunities. Analyses of labour market dynamics indicates that the probability of leaving unemployment falls off substantially as the duration of the unemployment spell increases. A major conclusion of the paper is that the longer term unemployed appear to be segmented from other labour market participants. An implication of this finding is that there b very little which the longer term unemployed can do at the margin to influence their success other than adopt the most productive method of job search.
The Demand for Australian Rules Football*
Authors: BORLAND JEFF
Published: October 2007

Declining attendances at Australian Rules football games organized by the VFL recently have become the focus of much concern. An econometric analysis of the demand for football is presented, using annual average attendance data for the years 1950–86. It is found that increases in admission prices had a significant negative effect on demand, and increases in real income a positive impact. Amongst other variables of importance in explaining demand are lagged attendance and uncertainty of outcome. Elasticities of demand are calculated and it is shown how they might be used to predict attendance under different pricing scenarios.
Buying Australian
Authors: HORRIDGE MARK , PARMENTER BRIAN R. , WARR PETER G.
Published: October 2007

We investigate the short‐run effects on the trade balance and on aggregate employment of persuading domestic residents to switch expenditure from imports to domestic commodities. Simulations with ORANI indicate that the favourable initial effects of such switches may be offset significantly by induced demand for imports as domestic production expands and by the inflationary effects of domestic expansion which erode the international competitiveness of exports and import‐competing products.
Automobile Loss Rates and the Expected Capital Cost of Vehicles: An Empirical Note*
Authors: HENSHER DAVID A.
Published: October 2007

Knowledge of the market loss rate of vehicles is necessary for the determination of the expected capital cost of vehicles, a major influence on vehicle demand. It is also required in its own right for predicting the availability of specific vehicles of known vintage at future dates. We draw on the existing literature on vehicle scrappage and its links with future vehicle prices to provide a simple framework for determining the loss rates and relevant capital costs of the stock of vehicles available in 1982 in the Sydney metropolitan area. The empirical evidence shows that vehicle prices haw an influence on vehicle life expectancy. and that technical deterioration alone is an inappropriate basis for loss rate determination.
The Contribution of the Farm Sector to Annual Variations in Gross Domestic Product in Australia‘
Authors: O'MARA L. P.
Published: October 2007

A simple empirical model is developed in which some of the main linkages from the farm sector to the Australia macroeconomy are captured. The model is simulated over the period from the mid‐1950s to the mid‐1980s. The results. though necessarily tentative, suggest that the relative importance of the form sector as a source of short‐term instability in the non‐farm sector of the Australian economy may not have declined over this period despite the relative decline in the ‘importance’ of the farm sector as indicated by more traditional measures.
Wages and Employment: A Framework for Analysis with Application to Three Policy Issues*
Authors: PISSARIDES CHRISTOPHER A.
Published: October 2007

This paper surveys recent developments in the theory of employment and wages and describes a framework for policy analysis which recognizes the existence of monopolistic elements in labour markets. Wages are determined by firm‐union bargains, firms choose the number of jobs, and workers influence the fraction of jobs that is filled through search. The framework is applied to the analysis of the wage and employment effects of indexation, tax‐based incomes policies and profit‐sharing.
Modelling the Determinants of Trans‐Tasman Migration after World War II*
Authors: BROSNAN PETER , POOT JACQUES
Published: October 2007

This paper identifies the economic and demographic factors responsible for migration flows between Australia and New Zealand by means of a probabilistic model of emigration in both directions. The largely uncontrolled flows between the two countries have the same determinants as those commonly found in studies of internal migration. The cost of migration (proxied by the real cost of air travel), labour market conditions and the potential earnings differential play a role, although the results are modified by the incidence of return migration and age composition.
Declining Strike Activity in Australia 1983–85: An International Phenomenon?*
Authors: BEGGS JOHN J. , CHAPMAN BRUCE J.
Published: October 2007

The paper investigates the possible effect of Australian incomes policy on strike activity compared to other countries not adopting such a strategy. The chief issue is whether Australia experienced a more pronounced fall in strikes during the 1983–85 period of the Accord than a representative group of other countries. We also seek evidence for the proposition that there is a transmission of industrial restiveness between countries. The results are unambiguous: in an international context the Australian diminution of strike activities after the beginning of the Accord was most unusual, and there is no evidence of a general world‐wide transmission of industrial disputation.
Imports in Keynesian Models*
Authors: BONNICI JOSEF
Published: October 2007

This paper examines two main problems relating to the introduction of imports in the simple Keynesian model. First, imports need to be made a function of the aggregate demand components rather than income. Second, unless one assumes that intermediate imports are zero the solution of the simple Keynesian model will provide miltipliers which Overstate the exogenous demand change for domestic product.
Diagnostic Testing in Applied Econometrics*
Authors: BEGGS JOHN J.
Published: October 2007

Economic policy formation and the development of economic theory both rely ultimately upon empirical analysis for their direction and sustenance. Recent contributions from econometric theory suggest that the quality of the advice obtained from applied econometric research can be considerably improved by more systematic testing of empirical models. These new tests help identify both strengths and weaknesses of the models. Though fundamental economic theory and good knowledge of data are the primary ingredients of applied economic research, these new diagnostic tests are an important adjunct to existing methodology. This survey introduces the non‐specialist econometrician to diagnostic model testing, and thoughout emphasizes the heuristic rather than the mathematical underpinnings of the testing strategy.
The Welfare Costs of the Australian Telecommunications Pricing Structure*
Authors: ALBON ROBERT
Published: October 2007

Australian telecommunications pricing has developed in an environment which is uncompetitive, subject to pressures to cross‐subsidize and insufficiently cognizant of relevant costs and demands. STD and local call charges are too high and access charges too low. Compared with a structure which charged marginal usage costs and retrieved costs of subscribers' loops and overheads through access charges, the pricing structure has an estimated efficiency cost of about $240 m in 1985–86.
Wealth Effects and the Valuation of Common Access Facilities: Some Calculations*
Authors: BALDRY JONATHAN C.
Published: October 2007

Using a CES utility function modified to allow for zero usage of one commodity, this paper calculates the relative difference between compensating and equivalent variation measures of the welfare loss due to withdrawal of a commodity, for various plausible values of the relevant demand function parameters (income elasticity, expenditure share and substitution elasticity). Contrary to what is frequently asserted these differences can be quite significant
Real Interest Rates and Home Goods: A Two‐Period Model*
Authors: HARTLEY PETER R. , KYLE ALBERT S.
Published: October 2007

Using a simple model of a small open economy which includes traded and non‐traded goods and output in two periods, we demonstrate that changes in real interest rates will be associated with changes in real exchange rates. A high real interest rate will encourage consumers to substitute away from present and toward future consumption. To transfer consumption of non‐traded goods intertemporally, intersectoral resource flows are required In the simplest model, this in turn requires opposite movements in the real exchange rate over two periods.
The SRD Requirement and Monetary Policy*
Authors: HARPER IAN R.
Published: October 2007

This paper considers the role of the SRD requirement as an instrument of monetary policy. It argues that the mere presence of the SRD requirement and neither the value of the SRD ratio nor its variability over time defines the significance of the SRD for monetary policy. A decision to abolish the SRD requirement may destabilize the demand for cash and complicate the task of the monetary authorities. Payment of interest on SRD accounts would serve to alleviate the distorting effect of the SRD requirement on the pattern of financial intermediation.
The Economics of International Policy Coordination*
Authors: McKIBBIN WARWICK J.
Published: October 2007

One aspect of reforming the world monetary system is the issue of designing a set of ‘rules of the game’ within which countries can pursue their own national objectives and yet which still leads to some form of global coordination of macroeconomic policies. The issue of strategic interactions between countries has recently received some analytical insights with the application of game theory to the economics literature on interdependence between countries. The purpose of this paper is to survey these recent applications of static and dynamic game theory to the question of international policy coordination. It also surveys the results of the few empirical attempts to measure the potential gains to coordination.
The Fall and Rise of Keynesian Economics*
Authors: BLINDER ALAN S.
Published: October 2007

Keynesian economics came under much criticism in the 1970s This paper argues that the decline in Keynesian economics and the rise in, notably, new classical economics in this period related to their respective theoretical appeal rather than their ability to explain developments in the macroeconomy. As this has become increasingly recognized, and with the development of sound microeconomic foundations, Keynesian economics has again been on the rise.