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Purpose – In the literature on the effects of economic globalization, the compensation hypothesis suggests that there is a positive link between government size and external risk as governments perform a risk mitigating role to insure against productivity shocks through transfers. In contrast, the conventional wisdom hypothesis states that more openness will lower tax rates and lead to smaller government due to increased international factor mobility which undermines the ability of governments to tax. The purpose of this paper is to test the literature and present the authors' conclusions. Design/methodology/approach – Using time series data for the USA, Canada, Japan and Australia over the period 1960-2008, the authors test the asymmetric relationship between government size and terms-of-trade volatility by applying multivariate hidden cointegration analysis. Findings – The findings show that high terms of trade volatility are positively related to government spending in the all sample countries. The effect is stronger in the case of positive movements than negative ones. Practical implications – The policy implication is that the size of the public sector might play a risk-reducing role in economies with significant amounts of external risk. In particular, public expenditure is considered to be an important fiscal policy instrument when terms of trade volatility are high. Originality/value – The paper describes the first study of its kind. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the usefulness of the yield spread for forecasting growth in the Australian economy since 1969. Design/methodology/approach – This paper applies time series analysis to evaluate the in-sample and out-of-sample forecasting power of the spread-growth nexus in Australia for the period spanning from 1969 to 2014. Findings – This paper concludes that the spread serves as a useful predictor of growth in output, private dwellings, private fixed capital formation, and inventories in Australia, both in-sample and out-of-sample. Its predictive content is not sensitive to the inclusion of monetary policy variables or the switch to the inflation-targeting regime by the Reserve Bank of Australia in the early 1990s. Originality/value – This paper provides significant evidence to policy makers and market participants on the usefulness of the spread in forecasting output growth for up to eight quarters ahead. [ABSTRACT FROM AUTHOR]

Purpose - To investigate the extent of over-education for recently arrived tertiary educated male immigrants in order to ascertain if higher educated immigrants face assimilation hurdles in the Australian labour market. Design/methodology/approach - Using immigrant longitudinal data (LSIA), this paper uses the job analysis/objective method of defining over-education. Also, bivariate probits are used to account for selectivity into employment when studying the determinants of graduate over-education. The over, required and under-education (ORU) earnings function is utilised to find the rates of return to education investment. Findings - It is found that English speaking background (ESB) immigrants to have similar rates of over-education compared to the native born, while only Asian non-English speaking background (NESB) immigrants see a rise in over-education after tighter immigration and welfare policies were introduced. Returns to required schooling are substantial, but the penalty for excess years of schooling is large, though consistent with the stylised facts of over-education. Research limitations/implications - Short time-frame (up to five years) only allows for an investigation of initial assimilation. Originality/value - Using panel data, this paper is the first to study the initial phase of highly educated immigrant assimilation into the Australian labour market from the viewpoint of job matching rather than just employment. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to investigate whether the Australian equity market is informationally efficient in the semi-strong form with regard to interest rates and the exchange rate shocks during the period 1994-2006. Design/methodology/approach - There is evidence that the data are non-normal and that autoregressive conditional heteroskedasticity (ARCH) effects exist and in such circumstances, standard estimation methods are not reliable. A new method introduced by Hacker and Hatemi-J which is robust to non-normality and the presence of ARCH is applied. Findings - The results show the Australian equity market is not informationally efficient with regard to either the interest rate or the exchange rate. Originality/value - The empirical findings, in contrast to several previous studies, imply that the possibility for arbitrage profits in the equity market might exist. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to reflect on the sources of the technical inefficiency of health care foodservice operations, using a sample of Australian and American hospitals. Design/methodology/approach - The paper applies the stochastic frontier model to reflect on the technical inefficiency and its sources. The advantage of the model is that it allows the simultaneous parameters estimation of technical efficiency as well as the factors that explain variations in technical efficiency. A set of hypotheses are tested to ensure the applicability and suitability of the suggested model. Then the model parameters are estimated, discussed and checked against the theoretical requirements and the literature. Findings - Results show that all the variable coefficients are correctly signed and that the average technical efficiency is around 83 percent for Australia and 80 percent for the USA. Practical implications - The technical efficiency results, according to the introduced model, suggest that health care foodservice operations in both countries are not operating at a full efficient level. The results also reveal that factors such as manager's education, manager's experience, and size have a direct impact on reducing the level of technical inefficiency of these operations. Originality/value - This paper overcomes the limitations of the existing efficiency techniques in the area of health care foodservice and also provides policy implications by emphasizing on the sources of technical inefficiency of health care foodservice operations for Australia and USA. [ABSTRACT FROM AUTHOR]

Purpose - This paper aims to investigate the determinants of taking out government-funded student loans for university study in Australia. Design/methodology/approach - The paper uses an ordered probit model to quantify the influence of the various factors which affect students' decisions on funding their tertiary study using student loans or through other means. Findings - The study finds that the probability of taking out student loans for the full cost of university is largely influenced by students' socioeconomic status. Other major influences on this decision include students' demographic and university enrolment characteristics. Research limitations/implications - A limitation of the work is that only a neighbourhood (rather than an individual-level) measure of socioeconomic status was available, and future research should seek to address this. Practical implications - The research shows that the parameters of loan schemes do not seem to be able to over-ride the influence that family background has on loan taking behaviour. That is, poor students use loans regardless of the parameters of the loans scheme in order to overcome short-term credit constraints. In other words, these student loan schemes channel funds to those without other means of funding their higher education. Originality/value - By showing the impact that income contingent provisions have on loan taking behaviour, the paper informs policy makers of potential impacts from modifying loans schemes to reflect this characteristic. [ABSTRACT FROM AUTHOR]

The dissolving trade barriers, financial deregulation, hyper-mobility of capital and the rapid diffusion of new information technologies have ushered the Australian economy into the borderless world. The orthodoxy that states that centralised wage-fixing in Australia has impeded wage flexibility and resulted in high unemployment is unconvincing. Partly, this is because in the 1980s Australian labour market institutions have been decentralised and decollectivised in response to pressures from the borderless world. The insights garnered from cross-sectional comparative statics that, first, skill-biased Schumpeterian technological change was the major cause of labour immiserisation and, second, adverse Stolper-Samuelson trade played an insignificant effect need to be reviewed. Parsimonious dynamic time-series models of trade and technology have been formulated using general-to-specific methods after taking account of stochastic trends through unit root and cointegration tests. Granger causality and non-nested tests applied to these models support the contention that both trade and technology contributed to increasing wage disparity during the borderless era. Moreover the supply side factors such as female participation, immigration and institutional factors such as deunionisation have also increased wage disparity. The deregulation of the Australian labour market by the Workplace Relations Act, whilst an inevitable response to achieve competitiveness in the borderless world market, would exacerbate wage inequality. Policies aimed at skill accumulation on the one hand, and social welfare policies involving negative income taxes on the other may have to be implemented to mitigate the deleterious social effects of rising wage inequality. [ABSTRACT FROM AUTHOR]