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Lists Australian and New Zealand working papers and research reports in the field of economics as of September 1988. Topics, Authors, Manner of obtaining copies.

This article discusses recent research on the macroeconomic effects of fiscal policy—the theme of the 2018 edition of the Melbourne Institute Macroeconomic Policy Meeting. We review recent research findings on the effects of fiscal multipliers in normal times, during booms/busts, and in the presence of the zero lower bound. Studies on the effects of fiscal policy in open economy settings as well as contributions on the fiscal‐monetary policy mix are also considered. We conclude by outlining a few research avenues that are particularly relevant from a policy standpoint. [ABSTRACT FROM AUTHOR]

Lists several papers and research results in economics featured in the June 1978 issue of the periodical 'The Australian Economic Review.' Health care under voluntary insurance; Incidence of poverty; Index of official economic forecasts and projections; Demand for and supply of professionally-trained social workers; Volunteers in social welfare agencies.

Lists technical papers from the Institute of Applied Economic and Social Research in Australia. Titles and suggested prices.

ABSTRACT: This article discusses macroeconomic policies in a low interest rate environment, the central theme of the 2017 edition of the Melbourne Institute Macroeconomic Policy Meeting. After reviewing possible causes of the decline in interest rates observed since the 1990s, we present and discuss some of the challenges that monetary and fiscal policy face in a ‘new normal’ environment characterised by a real natural interest rate close to zero. Proposals by leading researchers on how to operate in such an environment are presented and discussed. We conclude by outlining some research questions that are highly relevant from a policy perspective. [ABSTRACT FROM AUTHOR]

The article comments on the article "Towards Full Employment," by Peter Dawkins and John Freebairn (hereafter, DF). They have written a very useful and stimulating paper on Australia's most pressing economic problem, unemployment. They present a fairly mainstream analysis of the causes of unemployment, attributing it essentially to two factors, high real wages and inadequate economic growth. They propose a solution aimed at reducing the aggregate rate to around 5 per cent over the next few years, which is to allow a fall in real wages of around 10 per cent. The most significant contribution of the paper lies in DF's recognition of the close nexus between wage outcomes and social security arrangements. This leads them to promote a radically different role in Australia for the tax and transfer system, one designed eventually to lead to negative income taxes. Their essential argument for a negative income tax is that such an approach allows cuts in real wages without increasing the dispersion of incomes; further it is alleged that the policy can be designed to avoid the current high effective marginal tax rates which make the reduction in unemployment more difficult than it need be.

In this paper, we investigate the behaviour of the Australian slate labour markets, focusing on the rote of geographic labour mobility. We find that interstate migration does play an important role in reducing differences in labour market conditions between states, although permanent (or very persistent) differences between state unemployment rates remain. We also find that out-migration from a state resulting front a relative downturn in its labour market occurs slowly and steadily. Most of the migration takes place, on average, within four years, and the process of adjustment is complete tier seven years. [ABSTRACT FROM AUTHOR]

During the Costello era, Australian Budgets under-estimated tax receipts for the upcoming fiscal year on 11 out of 12 occasions. The Swan-Hockey era saw over-estimates of tax receipts for eight fiscal years in a row. In this way, the last two decades have seen substantial serial correlation in the errors of Budget revenue forecasts, revealing an inefficient forecasting process. We improve the efficiency and accuracy of Budget forecasts of tax revenue by incorporating National Accounts data on household saving behaviour. In particular, the adjusted R2-statistic is substantially higher. Household saving behaviour also helps to predict nominal gross domestic product growth. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to evaluate the forecast of Australian inflation based on four alternative procedures: a univariate time series model, an interest rate model, an error correction model and a public survey of inflation forecasts. We derive estimates of expected and unexpected inflation from each of the methods and compare the out-sample forecasting results. Based on a range of evaluation criteria, the time series model dominates the other models, with the interest rare model, the error correction model and the survey forecasts following in that order. [ABSTRACT FROM AUTHOR]

Comments on the paper 'Elements of a Fiscal Politics: Public Choice and Public Finance,' by Geoffrey Brennan, published in the September 1984 issue of the 'Australian Economic Review.' Views on the paper's central theme; Additional inputs to the issues of taxation policy in Australia; Advantages and limitations of the study; Implications for fiscal policy-making.

The object of this paper is to indicate how public choice theory and orthodox normative tax theory may be integrated within a single coherent intellectual framework. Because public choice theory has quite different conceptual foundations from normative tax theory, this is no simple task. A purely positive fiscal theory, that derives tax arrangements as one aspect of the emergent political equilibrium, would leave no logical room for normative tax theory at all: the question as to what the tax system ‘ought to be’ becomes irrelevant, or at least inseparable from the broader question as to the appropriateness of general political institutions. However, if tax arrangements are viewed as part of the political institutional framework, normative tax theory can be admitted — but in a somewhat reformulated way. The paper aims to set out briefly the reformulations required. [ABSTRACT FROM AUTHOR]

The article presents policy forum, which focus on the issue of capital controls and exchange rates in Australia. Since the Asian currency crisis began in 1997 there has been renewed debate about the desirability of capital controls and other measures to reduce volatility in exchange rates and capital flows. Economist suggests that real exchange rates are essentially unpredictable in the short and medium run, but are predictable in the longer run. Inflation differences between countries predict nominal exchange rate movements at a horizon greater than three years, though not at shorter horizons. The empirical evidence suggests that the average rate of depreciation of the home currency over a period greater than three years will be around 5 per cent. However, rates of depreciation on a month-to-month or year-over-year basis will be unpredictable. The short to medium-run volatility in exchange rates was not expected when exchange rates began to be floated after the collapse of the Bretton Woods system of fixed exchange rates in 1971. The then prevailing models of exchange rate determination predicted some exchange rate overshooting, but the subsequent variability of exchange rates and their unpredictability were not expected.

This article contributes to the important debate over data quality and comparability by examining how aggregated data from the household income and expenditure surveys compare with external sources. It presents an overview of comparisons of aggregates derived from the Australian Bureau of Statistics household income and expenditure surveys against external sources. The issues of quality and inter temporal comparability of the relevant survey data are not restricted to under-reporting of income in the latest surveys. These comparisons are started on the assumption that the data from these external sources are correct, although definitional differences are crucial to the comparisons. Comparisons with external aggregates suggest that subcategories of income in the household surveys vary in their quality. The article further identifies key areas of concern, as a precursor to trying to remove or reduce the impact of the underlying factors that give rise to them. While it is obviously desirable to quantify the effect of these issues on analyses of poverty and inequality. The article shows how well the survey aggregates match external aggregate data in order to make inferences about the quality.

This article discusses the economy–wide effects of fiscal policy and major features of public outlays, receipts and debt trends in Australia. [ABSTRACT FROM AUTHOR]

This article examines the impact of the elimination of x-inefficiency in the Australian electricity supply industry using a computable genera! equilibrium (CGE) model of the Australian economy. Data envelopment analysis and a stochastic production frontier model are applied to measure x-inefficiency in the electricity industry. The potential increase in total factor productivity resulting from microeconomic reform is introduced into the CGE model as a factor-augmenting technological change. The model is used to measure the macroeconomic effects of microeconomic reform of the electricity industry. The Monash model is also used to replicate the results of earlier studies by the Industry Commission (1995) and Quiggin (1997) and thereby to provide a basis for comparing the three sets of results. The results of the current study imply that the impact of microeconomic reform on economic growth could well be significant if only a small proportion of the benefits were to be reflected in terms of an increase in aggregate employment. [ABSTRACT FROM AUTHOR]

This article presents forecasts of key variables for the Australian economy in 1988-89 and 1989-90. The first section summarises our forecasts. Section 2 provides the underlying details for 1988-89. It includes a comparison of our forecasts with those in the Budget Papers and an analysis of the sensitivity of our forecasts to variations in key assumptions. The underlying details and some sensitivity analysis for 1989-90 are in Section 3. Section 4 contains concluding remarks. [ABSTRACT FROM AUTHOR]

In this paper I discuss indices used to measure the level of poverty in Australia among demographic groups and over time. The strengths and deficiencies of indices in current use are noted and alterative indices are presented. The theoretical properties of the indices are compared and discussed. The discussion is extended to include a brief review of poverty lines paying particular attention to the method used to update them. Poverty is measured for 1981-82 and 1985-86 for broad demographic groups. Differences between groups in each year and trends over time are noted and discussed. The performance of alternative indices are compared. [ABSTRACT FROM AUTHOR]

Earlier comparative work on income distribution has tended to suggest that Australia is characterised by less income inequality than other industrialised economies. Concerns about the quality of the Australian data used in such comparisons have led to the need for more detailed assessment of the situation. The Luxembourg Income Study has been a focus for this work by bringing together microdata sets for a range of countries and reorganising them to conform to standardised concepts and definitions. This paper builds on earlier work undertaken as part of the Luxembourg Income Study by including Australia in an international comparative analysis of income distribution and redistribution. The Australian data are those from the 1981-82 Income and Housing Survey, with income tax imputed onto the data file. Results are presented for the gross and net income distributions between both families and individuals in seven countries. A common set of equivalence scales is also used to adjust for differing family needs. The results indicate that, using several summary measures of inequality, the distribution of income in Australia is less equal than in four of the other six countries studied. Earlier research which placed Australia high on the international league table of income equality is thus not confirmed by the results. [ABSTRACT FROM AUTHOR]

The article outlines the main features of the Federal budget of Australia for 1982-83 and presents a broad assessment of how the budget measures alter the economic outlook for 1982-83. The budget incorporates estimated growth of 11.3 per cent in receipts to $45,393 million and estimated growth of 13.9 per cent in expenditures to $47,067 million, resulting in an overall deficit of $1674 million and a domestic surplus of $230 million. The budget estimate of total expenditures differs very little from the forecast, but the distribution of spending among categories is rather different. The budget estimates for cash benefits to persons exceeds the estimate by $362 million, but abstracting from the effect of policy initiatives announced in the budget, the forecasts would imply only slightly stronger growth. The budget leads to increase the forecast of the rate of inflation but appears unlikely to affect the forecast of the rate of growth of real output or employment. The measures introduced in the budget will on balance have a direct positive effect on real household income.

This article was prepared by Professor R. Mathews of the Australian National University. It is based on a paper presented to the Public Forum on Company Taxation and Economic Recovery, Institute of Applied Economic and Social Research, University of Melbourne, 14 November 1975. In this article, I propose to review the recommendations on company taxation which were made by the Committee of Inquiry into Inflation and Taxation, and to examine the comments which have been made on those recommendations since the Committee's Report was tabled in Parliament at the end of May. I am afraid that many of the comments — both favourable and unfavourable — have reacted to the conclusions reached by the Committee rather than the arguments used to support those conclusions, and have therefore been lacking in critical perception. It seems from the discussion that the nature and extent of the problems which the Committee identified are not yet fully understood. Many people in both business and government still seem to believe that Australia's economic recovery depends merely on the restoration of business confidence, and that this can be achieved by stimulating consumer demand, reducing rates of taxation and providing incentives to business investment. [ABSTRACT FROM AUTHOR]

Comments on the paper 'Elements of a Fiscal Politics: Public Choice and Public Finance,' by Geoffrey Brennan, published in the September 1984 issue of the 'Australian Economic Review.' Views on the paper's central theme; Advantages and limitations of the study; Implications for fiscal policy-making.

We examine the cyclical relationship between labour market participation and economic activity in Australia. We find that the participation rate has a large and economically meaningful cyclical component. By cohort, the participation rates of young people, 25−54 year‐old females and older males are the most responsive to changes in economic conditions. If the participation rate did not adjust, expansions would be more inflationary; on the other hand, recessions would be more disinflationary and lead to larger increases in involuntary unemployment. [ABSTRACT FROM AUTHOR]

The article discusses trends, updates, and outlook for the Australian economy. Topics explored include the gross domestic product (GDP), consumption, and unemployment rates recorded from 2017 to 2018, international economic developments in the U.S., Europe, and China which could impact Australia, and the contribution of non-mining business investments to Australian economic growth.

The article discusses the Australian economic condition in 2016 and the impact of international economic events on the country's economy. Several countries influenced Australian economy which include the U.S., European countries such as Germany, Great Britain and France, and Japan. The trends noted in the country include growth in net exports, growth in the housing market, and an improvement in the unemployment rate.

Analysing private market research data, we estimate the degree of market concentration across 481 industries in the Australian economy. On average, the largest four firms control 36 per cent of the market. Some industries are considerably more concentrated. In department stores, newspapers, banking, health insurance, supermarkets, domestic airlines, Internet service providers, baby food and beer, the biggest four firms control more than 80 per cent of the market. We suggest ways in which high market concentration may increase inequality and discuss some policy ideas to address the problem. [ABSTRACT FROM AUTHOR]

The article discusses developments in the economy of Australia as of March 2015. Stability of U.S. economic recovery and Japan's sales tax hike are cited as uncertainties surrounding global economic conditions in 2014. Particular focus is given to the growth in Australia's terms of trade, as well as domestic economic activity during the 2013-14 period. Topics discussed include state of the labor market, inflation trends, and macroprudential policies.

The article analyzes Australian state occupational data and discusses what this data says about macro wage equations in Australia. Details about the labor markets and unemployment situations in various Australian states are provided. The impact of the mining boom in Australia on wage inflation is explored and analyzed on a state-by-state basis. The difference in annual wage gains in the states of Western Australia, Queensland, and South Australia is explored. The impact of state-based wage movements on Australian economic policy is also investigated.

This article examines the sources of economic growth in Australia from 1960 to 2000 by adapting a framework developed in Jones (2002), whereby long-run growth is driven by the global discovery of new ideas, which in turn is tied to world population growth. We find that, contrary to the conventional view as suggested by sustained growth rates and a stable capital–output ratio over the last several decades, Australia is clearly not on its steady–state balanced growth path. Australia has benefited from increases in educational attainment and research intensity: 42 per cent of Australian growth between 1960 and 2000 is attributable to the rise in educational attainment, about 20 to 40 per cent is attributable to increasing research intensity, while only 10 to 30 per cent is due to long-run population growth in the idea-producing countries. [ABSTRACT FROM AUTHOR]

Abstract Unexpected inflation, disinflation or deflation cause arbitrary income transfers between an economy's borrowers and lenders. This redistribution results from distorted real interest rates that are too high when price level changes are over-predicted and too low when they are under-predicted. This article shows that in Australia's case, inflation expectations were mostly biased upwards throughout the 1990s, according to the Melbourne Institute of Applied Economic and Social Research series and to a new derived series based on bond yields, implying that real interest rates were too high over this time. In turn, this caused substantial arbitrary income transfers from debtors to creditors, estimated to have averaged up to 3 per cent of gross domestic product over the period. [ABSTRACT FROM AUTHOR]

This article presents a basic version of the inter temporal model and examines its ability to explain fluctuations in Australia's current account. The empirical results presented in this article suggest that the present value model is able to explain annual fluctuations in Australia's current account deficit since the beginning of the 1980s. This provides some support for the position that the current account deficit is appropriately viewed as the outcome of forward looking inter temporal saving and investment choices by Australians. The year-to-year fluctuations in the current account are the outcome of actions by Australians to smooth their consumption paths. The present value model in equation implies a simple relationship between the means of the current account and the change in national cash flow. Present value model tested in this article is derived from a quite restrictive inter temporal model. Although the ability of the current account to forecast changes in national cash flows is consistent with the present value model, it does not provide a full test of all of the restrictions imposed on the data by the model.

This article examines the lifetime redistributive impact of government health outlays and finds that such outlays redistribute income from the lifetime rich to the lifetime poor and from men to women. [ABSTRACT FROM AUTHOR]

This article examines the orders of magnitude of three different components of redistribution in the context of indirect taxation and changes arising from the introduction of the GST. [ABSTRACT FROM AUTHOR]

Australians’ commitment to equitable distribution means that in the twenty–first century we will have all or none of economic reform, income security, full employment and strong economic growth. [ABSTRACT FROM AUTHOR]

In this article we examine three broad issues: (i) the expected impact of the recent petrol price rises on prices throughout the economy, (ii) the hypothesis that the economy is now less susceptible to oil price rises than it was in the 1970s when the first major oil price rises occurred, and (iii) the likely distributional impacts of the petrol price rises. A modified input-output (IO) price model is used to simulate the impact of a twofold increase in petrol prices on the sectoral and aggregate price indices in Australia. The 1996-97 and 1977-78 IO tables are used. Among the results is an estimated impact on the consumer price index of 1.8 percent. Also, the same petrol price shock would have consistently larger price effects in the late 1970s than in the late 1990s. Further, using the 1998-99 Household Expenditure Survey, we find that the petrol price rises are regressive. [ABSTRACT FROM AUTHOR]

The investment by government and individuals in three-year and four-year bachelor degrees leads to significant economic benefits for both parties. Science and Technology (S&T) bachelor degrees yield higher private rates of return, 20.1 per cent (three-year) and 15.0 per cent (four-year), than for Humanities and Social Science (H&SS) degrees, 13.7 per cent and 10.3 per cent respectively. The social rate of return for all degrees is in the range 8.7 per cent to 12.1 per cent. A balance sheet analysis reveals that the return to government is 1.3 to 1.7 times for S&T degrees and 1.7 to 2.1 times for H&SS degrees. Net present value (NPV) lifetime earning increases to the graduate, relative to private degree costs, range from 1.4 to 3.7 times. For two-year Masters-by-research degrees and four-year Doctor of Philosophy degrees in S&T and H&SS disciplines the NPV lifetime earnings, relative to private degree costs, range from 1.2 to 2.9 times for research degrees. Private rates of return are in the range 12.0 per cent to 12.7 per cent for S&T and from 8.8 per cent to 10.4 per cent for H&SS research degrees. Social rates of return are in the range 5 per cent to 7 per cent if the spillover effect of university R&D on growth in gross domestic product is ignored. R&D spillover increases the social rate of return to a range of 9 per cent to 11 per cent. [ABSTRACT FROM AUTHOR]

The purpose of this article is to study relative trends in total factor productivity (TFP) between the Australian and New Zealand manufacturing sectors from 1986 to 1996. Since 1984 both economies have undergone major structural changes with varying degrees of speed and intensity. We use the Malmquist index to measure TFP growth and decompose it into an efficiency change and a technical change component. This decomposition provides extra insight on accessing relative productivity trends during a period of economic reform. The results indicate the Australian manufacturing sector exhibits better rates of individual factor productivity performance while multifactor productivity is estimated to be higher in New Zealand manufacturing. TFP growth in New Zealand is driven by technical rather than efficiency change. In fact, the New Zealand manufacturing average rate of efficiency change is estimated to be negative over the sample period. [ABSTRACT FROM AUTHOR]

The article presents information on the Australian economy as of 1982-83. Strong growth in domestic demand pushed up the rate of growth of real non-farm gross domestic product (GDP) in 1980-81 to 5.1%, its highest level since 1972-73, according to March quarter 1982 national accounts data rebased to 1979-80 prices. But the subsequent twelve months brought a marked slowing in the growth of domestic demand, together with a further weakening in net exports, and non-farm GDP is estimated to have increased by only 1.9% in 1981-82. On the usual forecasting assumption of no change in the policy stance, it was expected that the slowing in growth of domestic demand will continue during 1982-83. Although some improvement in net exports is expected, it will not be sufficient to offset the further slackening in domestic demand. Non-farm GDP is forecasted to increase even more slowly, by only 1.2% in 1982-83. This slowing in the pace of economic activity has, not surprisingly, exerted a strong adverse impact on the labor market.

The article presents information on the economic situation in Australia based on the 1982-83 budget. During a year when output growth was already expected to be negligible and inflation to increase, the 1982-83 budget will exert a contractionary and inflationary influence on the economy. Thus, the whole array of exogenous influences on the level of economic activity will be contractionary in 1982-83. The net impact of lower personal income tax rates, higher cash benefits and higher indirect taxes introduced in the budget is a modest boost to real disposable income. But the rate of growth of wages and non-farm business income is slowing and farm income will fall sharply because of drought. With inflation accelerating, the growth rates of real disposable income and of real consumption will slow. Real private investment spending will fall slightly and housing expenditure will fall even further than last year. Public sector spending will accelerate, but the upshot is a halving in the rate of growth of domestic demand to 2 per cent. A rundown in stocks and another big deficit in the real balance of trade in goods and services completes the gloomy demand picture.