Household mortgage choice: theoretical and empirical evidence. A house is often the largest component of household assets, and financing its purchase involves choosing a mortgage product from many alternatives. Inefficiencies and incompleteness in mortgage markets have important consequences. This project uncovers theoretical and empirical evidence on why Australians choose particular mortgage products.
Information design, cognitive abilities and macro-economic stability. This project aims to improve our understanding of individual decision making in financial markets and its implications for macro-economic stability. Using laboratory and internet experiments, models of adaptive choice behaviour will be developed and validated. The project will help to gain insight into how past information, and the way it is presented, affects investment decisions, which individual characteristics matter for d ....Information design, cognitive abilities and macro-economic stability. This project aims to improve our understanding of individual decision making in financial markets and its implications for macro-economic stability. Using laboratory and internet experiments, models of adaptive choice behaviour will be developed and validated. The project will help to gain insight into how past information, and the way it is presented, affects investment decisions, which individual characteristics matter for decisions, and how this behaviour translates into the evolution of aggregate macro-economic variables. The expected outcomes of the project will have the potential to improve the design of tools for better individual financial decision making, to stabilize volatile markets and to enhance economic welfare.Read moreRead less
Endgame: managing superannuation in later life. This project aims to come up with strategies for improving superannuation advice for the elderly - including retirees, and also those on the cusp of retirement, who often have little or no scope for working harder or longer to restore their finances. It applies recent developments in financial economics to improve the quality of financial planning advice.
Macroeconomic Consequences of Macroprudential Policy. This project aims to investigate the macroeconomic consequences of macroprudential policies and to provide robust, empirically-based advice to policy-makers about how they should be conducted. The global financial crisis motivated many nations to introduce new policies – known as macroprudential policies – with the explicit goal of maintaining financial stability. Important components of the project include estimation of a multisector small o ....Macroeconomic Consequences of Macroprudential Policy. This project aims to investigate the macroeconomic consequences of macroprudential policies and to provide robust, empirically-based advice to policy-makers about how they should be conducted. The global financial crisis motivated many nations to introduce new policies – known as macroprudential policies – with the explicit goal of maintaining financial stability. Important components of the project include estimation of a multisector small open economy model with interactions between the financial sector and the rest of the macroeconomy and development of new methods to evaluate these policies. Assessing the sensitivity of the performance of macroprudential policies to variations in key dimensions of the model is another important aspect.Read moreRead less
Gross credit flows, credit reallocation, and the macroeconomy. This project aims to construct measures of credit reallocation from regulatory bank-level data for Australia and other countries. The project intends to develop empirical models able to evaluate the role of credit reallocation on aggregate output and a theoretical model with search and match frictions to evaluate quantitatively the role of bank credit in explaining macroeconomic outcomes. The project expects to provide significant be ....Gross credit flows, credit reallocation, and the macroeconomy. This project aims to construct measures of credit reallocation from regulatory bank-level data for Australia and other countries. The project intends to develop empirical models able to evaluate the role of credit reallocation on aggregate output and a theoretical model with search and match frictions to evaluate quantitatively the role of bank credit in explaining macroeconomic outcomes. The project expects to provide significant benefits for policymakers for assessing the interplay between monetary and credit policy, formulating macroeconomic and macro prudential policies, and shedding light on the causes of productivity dynamics in Australia, boosting its comparative advantage.Read moreRead less
Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use ad ....Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use advanced statistical methods to estimate the benefits of clearer decision-making. The outcomes of this project includes new models of complex financial decisions, and a better understanding of where confusion arises and the effects it may have. Decreased confusion will raise financial well-being and help communities become more resilient to financial shocks.Read moreRead less
Computational methods for solving modern asset pricing models. This project aims to solve a broad range of asset pricing models. Movements in asset prices affect private investors, public sector finances, wealth distribution and business activity levels. Economists have tried to build better models of asset prices, moving away from hyper-rationality and towards realistic features including heterogeneity, habit persistence and bounded rationality. These models’ additional complexity makes them di ....Computational methods for solving modern asset pricing models. This project aims to solve a broad range of asset pricing models. Movements in asset prices affect private investors, public sector finances, wealth distribution and business activity levels. Economists have tried to build better models of asset prices, moving away from hyper-rationality and towards realistic features including heterogeneity, habit persistence and bounded rationality. These models’ additional complexity makes them difficult to solve or to apply to real world problems. The project will use modern hardware and computational tools, insights from economics literature and numerical analysis to provide a set of solution methods for such asset pricing models. This is expected to improve policy analysis and decision making under uncertainty.Read moreRead less
Discovery Early Career Researcher Award - Grant ID: DE120101588
Funder
Australian Research Council
Funding Amount
$375,000.00
Summary
The impact of aggregate and idiosyncratic shocks and uncertainties: do immigrants behave differently than the native-born? The project will examine the role of shocks/uncertainties on differences in consumption, savings and labour supply of immigrant and native-born indigenous and non-indigenous population. The results will help guide the formulation of immigration/integration policy, and facilitate the design of programs in response to shocks and financial crises.
The Macroeconomic Effects of Global Uncertainty. This project aims to estimate the first global uncertainty index to enable Australian policymakers to design policies to efficiently manage global uncertainty shocks and limit the recessionary effects of such shocks. Uncertainty is a crucial driver of household and business consumption and investment decisions and, therefore, countries' business cycles. A global uncertainty index would aim to identify the role of global uncertainty as a driver of ....The Macroeconomic Effects of Global Uncertainty. This project aims to estimate the first global uncertainty index to enable Australian policymakers to design policies to efficiently manage global uncertainty shocks and limit the recessionary effects of such shocks. Uncertainty is a crucial driver of household and business consumption and investment decisions and, therefore, countries' business cycles. A global uncertainty index would aim to identify the role of global uncertainty as a driver of Australia's business cycle fluctuations, to understand if this role has become more relevant in recent historical periods due to globalisation, and to understand if the effects of fluctuations in global uncertainty have been more severe in economic recessions. The intended outcome of the project is to provide policy-makers with key inputs to design policies able to limit the severity of recessions and lift Australia's growth.Read moreRead less
Discovery Early Career Researcher Award - Grant ID: DE130100967
Funder
Australian Research Council
Funding Amount
$375,000.00
Summary
Understanding the effects of sovereign default risk on economic fluctuations in open economies. The recent financial crisis has shown that the possibility of sovereign default is no longer an exclusive feature of developing countries. This project incorporates default risk into structural modeling of how foreign disturbances affect the domestic economy. Our results will aid in developing policy responses to adverse macroeconomic events.