Search

The swift and immense shock of the coronavirus pandemic and subsequent containment measures have plunged the global economy into a severe contraction. Governments around the world have reacted with unprecedented financial injections, pumping enormous amounts of money in to help the staggered economy and those who have lost their jobs. This research investigates how the economic stimulus has affected Australia's macroeconomic performance and reviews policy measures undertaken by the government and central bank as a response to the COVID-19 crisis which include fiscal, monetary and exchange rate measures. The research shows that the stimulus had some remarkable short-term benefits of boosting demand and strengthening the economy, in particular employment, which has experienced an unexpectedly quick recovery. The empirical analysis identified a strong statistical correlation between rapid money growth and inflation in the observed period. The analysis also confirms the short to medium-term risk of the excessive economic stimulus to price stability. In addition to this, the research shows that global supply constrains are not the principal cause of inflation. On the contrary, high demand induced by excessive COVID-19 economic stimulus, was the key contributor to the inflation burst. The crisis and the economy capacity were somewhat misdiagnosed - too much money was directed towards households and injected into the overall economy. The output gap was not carefully estimated, and all of this led to an overheated economy. When the economy finally bounced back and the unemployment rate fell, prices began to rise. Inflation has quickly gone from being very low to being very high. The holistic analysis of the stimulus package adds to existing research by investigating the relationship between money stock, inflation and output. There is an ongoing economic debate over the usefulness and the size of economic stimulus as well as disagreement as to whether and under what circumst, Thesis (Masters), Master of Philosophy (MPhil), Dept Account,Finance & Econ, Griffith Business School, Full Text

Financial stress creates pressure on individuals and families and can contribute to various short- and long-term issues. It not only affects the lives of the individuals, but also has a profound influence on countries’ politics and development. This thesis expands the explorations and study of this particularly sensitive and complex issue, focusing on the effects of financial stress on psychosocial processes in Australia. With the liberalisation and deregulation of financial markets, wide array of financial products and services become more available, and consumers are presented with more challenges and opportunities alike. The continuous progress of financial liberalisation challenges the whole society, requiring people to be well‐equipped with financial knowledge and financial skills to make sound financial decisions. A low level of financial literacy is more likely to lead to mismanaged savings and to affect retirement wealth accumulation. Inadequate financial management can result in financial hardship, with elevated levels of distress from greater exposure to chronic and acute stressors, such as monthly bills payment difficulties, family and relationship problems, and poor neighbourhood relations. This thesis uses cross-sectional and longitudinal panel data obtained from HILDA, the Household, Income and Labour Dynamics in Australia Survey, to generate a model to analyse the impact of financial stress on psychosocial processes in Australia. For the purpose of this analysis, indexes for financial stress, financial literacy, financial self-efficacy and social cohesion were developed to study these effects on Australian households. [...], Thesis (PhD Doctorate), Doctor of Philosophy (PhD), Dept Account,Finance & Econ, Griffith Business School, Full Text

Given the ongoing debate on International Financial Reporting Standards, foreign direct investment, stock market and transfer pricing, this thesis, for the first time, through three separate studies, investigates the effect(s) of the financial reporting environment (international standards on auditing and its interaction with international financial reporting standards) on capital flows (i.e. foreign direct investment and market capitalisation) and the institutional factors driving the adoption of transfer pricing rules. Foreign direct investment is important to all types of economies. Emerging and developing economies always develop economic policies (both fiscal and monetary) to attract foreign direct investment. The debate on International Financial Reporting Standards and capital flows is only one aspect of the Financial Reporting Environment. Study 1 of this thesis has informed the body of literature on the crucial role that the financial reporting environment of an economy would play in order to boost its FDI. So far, investors, policy makers, advisors have insights only and only on the microeconomic drivers of FDI. Likewise, as regards to short term capital flows, we have been informed only of the macro-economic environment influencing it and very few accounting performance indicators that influence for example, share prices and market capitalisation. Through study 2 of this thesis, an investigation of the impact of the financial reporting environment on share prices and market capitalisation has been conducted to increase our understanding of the roles of globally accepted reporting standards on the strength of financial information on the stock market. This thesis adds to the ongoing debate by providing insights on the role of International Standards on Auditing and its interaction with International Financial Reporting Standards on both foreign direct investment and market capitalisation. Study 3 as a separate study has examined the transfer pricing and it, Thesis (PhD Doctorate), Doctor of Philosophy (PhD), Dept Account,Finance & Econ, Griffith Business School, Full Text

One of the most important challenges in asset pricing is to explain cross-sectional variation in returns across different assets. As returns represent compensation for bearing risk, assets with different risk exposures should earn dissimilar returns. Consequently, investors and researchers have long attempted to specify factors capturing the risk that can drive stock returns by investigating the relationship between the potential risk factors and the future returns. Factors that are closely related to future returns are widely accepted candidates for better explaining return spreads. However, there is no consensus on the predictive power of these potentially competing factors. The intertemporal capital asset pricing model (ICAPM), for example, assumes that investors tend to hedge against unfavorable risk by adjusting their consumption and investment using shifts in future economic conditions and investment opportunities over the long run (Merton, 1973). As such hedging needs affect investor behavior, macroeconomic variables that predict future macroeconomic fundamentals and investment conditions are widely accepted return predictors. Among these macroeconomic factors is economic uncertainty, which measures the turbulence of general economic conditions. This is important as it heightens risks, adversely affects investment, and even triggers global financial crises and worldwide economic downturns. Many studies find that economic uncertainty, being an unfavorable shift in the economic and financial environment, undermines macroeconomic outcomes and eventually drags down market returns at the aggregate level. In their focus on individual stock returns, Bali et al. (2017, 2019a) conclude that domestic uncertainty exposure indeed predicts cross-sectional returns in the US. Motivated by the significant role of uncertainty in affecting macroeconomic conditions and stock market returns, this thesis investigates the relationship between exposure to economic uncertainty and f, Thesis (PhD Doctorate), Doctor of Philosophy (PhD), Dept Account,Finance & Econ, Griffith Business School, Full Text