Time-consistent macroeconomic policy in nonlinear models. Efforts to use fiscal policy for macro-stabilisation have led to elevated debt levels and possible default in many countries. This project examines the appropriate design of fiscal policy and its implications for debt over the business cycle.
Optimal policy in the global liquidity trap. The recent global financial crisis has led most central banks in developed economies to reduce their policy interest rates to unprecedentedly low levels. As a result, the liquidity trap has now become a serious concern internationally. This project will derive the optimal monetary and fiscal policy in the global liquidity trap. It will also show how a shock in one country affects other countries and propose tools for improving the empirical fit of the ....Optimal policy in the global liquidity trap. The recent global financial crisis has led most central banks in developed economies to reduce their policy interest rates to unprecedentedly low levels. As a result, the liquidity trap has now become a serious concern internationally. This project will derive the optimal monetary and fiscal policy in the global liquidity trap. It will also show how a shock in one country affects other countries and propose tools for improving the empirical fit of the models in a liquidity trap. This project will become the foundation for the discussion of policy options in the global liquidity trap.Read moreRead less
Inventories and the Business Cycle in Australia and the U.S. The project looks at the contribution that inventories make to business cycles in Australia and the U.S. It uses recent research by the chief investigator on measuring business cycles in order to explain how the presence of inventories in an economic system might influence activity in that system. It then adapts an existing model in the literature to quantify the role of inventories in the Australian and U.S business cycles.. It seeks ....Inventories and the Business Cycle in Australia and the U.S. The project looks at the contribution that inventories make to business cycles in Australia and the U.S. It uses recent research by the chief investigator on measuring business cycles in order to explain how the presence of inventories in an economic system might influence activity in that system. It then adapts an existing model in the literature to quantify the role of inventories in the Australian and U.S business cycles.. It seeks to answer a number of questions that have arisen in recent years over whether the business cycle is becoming longer owing to improved methods of inventory controlRead moreRead less
Nowcasting and Interpreting the Australian Economy. This project aims to investigate methods for nowcasting and interpreting the Australian economy. This is determining the current state of the economy and the factors contributing to it.
This project expects to generate new knowledge on how unconventional, new, data sources and innovative methods can be used to in nowcasting and how the Australian economy can be modelled.
The expected outcomes include timely new indicators of the state of the ec ....Nowcasting and Interpreting the Australian Economy. This project aims to investigate methods for nowcasting and interpreting the Australian economy. This is determining the current state of the economy and the factors contributing to it.
This project expects to generate new knowledge on how unconventional, new, data sources and innovative methods can be used to in nowcasting and how the Australian economy can be modelled.
The expected outcomes include timely new indicators of the state of the economy, and the factors contributing to it. This should provide significant benefits through informing the conduct of Australian macroeconomic policy, as the appropriate policy response depends not only on knowing the current state of the economy but understanding the economic factors underlying it.
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Computing probabilities of theories where these probabilities vary over time with applications in macroeconomics. This project will present a method to produce empirically based policy advice that accounts for the changing economic environment and that allows for a range of assumptions about how the economy works. The research and training will place Australia at the forefront of empirical macroeconomic research and strengthen international research networks. Policy making will be improved as: i ....Computing probabilities of theories where these probabilities vary over time with applications in macroeconomics. This project will present a method to produce empirically based policy advice that accounts for the changing economic environment and that allows for a range of assumptions about how the economy works. The research and training will place Australia at the forefront of empirical macroeconomic research and strengthen international research networks. Policy making will be improved as: it will use information that is more robust to false assumptions; it will quickly incorporate new information; and we will understand better why certain policies did or did not work at different times in the past. The research will impact upon other sciences such as physics and engineering that use the same underlying tools far more than do economists.Read moreRead less
MONETARY POLICY WITH LIQUIDITY CONSTRAINED GOVERNMENT DEBT MARKETS. Modern monetary policy seeks to influence domestic macroeconomic outcomes, using actions in official Government debt markets. The effectiveness of this route is being challenged by reductions in the level of Government debt outstanding. Monetary policy is faced with the possibility of operating in alternative financial markets. The project will:
* Examine alternative markets for monetary policy operation.
* Examine the effect ....MONETARY POLICY WITH LIQUIDITY CONSTRAINED GOVERNMENT DEBT MARKETS. Modern monetary policy seeks to influence domestic macroeconomic outcomes, using actions in official Government debt markets. The effectiveness of this route is being challenged by reductions in the level of Government debt outstanding. Monetary policy is faced with the possibility of operating in alternative financial markets. The project will:
* Examine alternative markets for monetary policy operation.
* Examine the effects of alternatives on real economy outcomes.
* Develop a model of the economy which controls for global financial conditions - which has not been done before.
* Combine modern econometric techniques.
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Empirical and Theoretical Coherence of Macroeconometric Models. Variants of the G-Cubed models are used by researchers, governments and international institutions for policy analysis. The need for policy makers to have models with substantial structural detail and a strong theoretical base is paramount for transparency and accountability. The development of simple SVAR models which capture these theoretical underpinnings will provide Australian policy makers with an effective tool for economic a ....Empirical and Theoretical Coherence of Macroeconometric Models. Variants of the G-Cubed models are used by researchers, governments and international institutions for policy analysis. The need for policy makers to have models with substantial structural detail and a strong theoretical base is paramount for transparency and accountability. The development of simple SVAR models which capture these theoretical underpinnings will provide Australian policy makers with an effective tool for economic analysis. It will also provide powerful tools that enable forecasting and detailed policy analysis within the same broad conceptual framework. The emphasis is on international and financial market linkages which encompass key issues facing the Australian economy.Read moreRead less
Estimation of the continuous piecewise linear model and macroeconomic applications. Relationships between economic variables are often characterised by non-linearities. This project develops a method to analyse a type of non-linearity that is frequently encountered in economics and uses this method to study four specific applications concerning the dynamics of inflation, growth, and the exchange rate.
A Principled Approach to Computer Simulation of Dynamic General Equilibrium Macroeconomic Models. In the last two decades a new generation of computer-intensive
modeling techniques has risen to prominence in macroeconomics. These
methods have broad policy applications, from public finance and
reserve bank operation to analysis of long-run productivity growth,
taxation reform, unemployment, international trade policy and natural
resource conservation. The size and complexity of these model ....A Principled Approach to Computer Simulation of Dynamic General Equilibrium Macroeconomic Models. In the last two decades a new generation of computer-intensive
modeling techniques has risen to prominence in macroeconomics. These
methods have broad policy applications, from public finance and
reserve bank operation to analysis of long-run productivity growth,
taxation reform, unemployment, international trade policy and natural
resource conservation. The size and complexity of these models means
that even computer-based techniques will rely for the foreseeable
future on efficient program design to solve them. The project will
construct a comprehensive set of solution techniques and software for
this class of macroeconomic models, including detailed mathematical
analysis on accuracy of model output.Read moreRead less
Automation and Income Inequality: Macroeconomic Policy Implications. The transition to wider use of robotics and artificial intelligence may eventually make our citizens better off, yet effects on domestic income and wealth inequality remain uncertain, depending strongly on general governance and macroeconomic policy regimes. This project would help clarify income inequality effects, both abroad and in Australia, through (i) new numerical theory from calibrated economic models at the global and ....Automation and Income Inequality: Macroeconomic Policy Implications. The transition to wider use of robotics and artificial intelligence may eventually make our citizens better off, yet effects on domestic income and wealth inequality remain uncertain, depending strongly on general governance and macroeconomic policy regimes. This project would help clarify income inequality effects, both abroad and in Australia, through (i) new numerical theory from calibrated economic models at the global and national levels; (ii) econometric testing of results from global and national data; (iii) the use of emerging insights to analyse economic policy responses and their global interaction as well as the implications for Australian economic policyRead moreRead less