International linkages between financial and real economy cycles. This project will develop empirical multivariate models of business cycles for different countries, and will study how they are linked via international financial markets. The significance of the project is that the models will integrate previous work done on financial-real economy links in single country settings, and it will explicitly study the effects of disequilibrium in international financial markets (such as overvaluation ....International linkages between financial and real economy cycles. This project will develop empirical multivariate models of business cycles for different countries, and will study how they are linked via international financial markets. The significance of the project is that the models will integrate previous work done on financial-real economy links in single country settings, and it will explicitly study the effects of disequilibrium in international financial markets (such as overvaluation of foreign currency) on individual economies. The project will determine the appropriate domestic monetary policy response to such shocks, and the potential for forecasting both the advent of such shocks and their impact on individual economies.Read moreRead less
Estimating and evaluating the predictive accuracy of structural macroeconomic models. This project will provide improved methods to inform Australia's macroeconomic policies and its strategies for economic development by suggesting the most adequate structural macroeconomic model for the Australian economy. Effective macroeconomic policies, in turn, assure stable economic development, smoothes effects of economic cycles and balances inflation, unemployment, the exchange rate and other macroecono ....Estimating and evaluating the predictive accuracy of structural macroeconomic models. This project will provide improved methods to inform Australia's macroeconomic policies and its strategies for economic development by suggesting the most adequate structural macroeconomic model for the Australian economy. Effective macroeconomic policies, in turn, assure stable economic development, smoothes effects of economic cycles and balances inflation, unemployment, the exchange rate and other macroeconomic indicators. All these indicators are closely linked to the welfare of the Australian people and prosperity of the Australian economy. The importance of an accurate macroeconomic analysis is increased in the current condition of inflationary pressures, fiscal challenges, climate change, and world market instabilities.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
Discovery Early Career Researcher Award - Grant ID: DE150100708
Funder
Australian Research Council
Funding Amount
$352,000.00
Summary
Understanding the Linkage of Public and Private Risk in the Global Economy. This project aims to develop a richly detailed model of the global financial system including both public and private institutions. By treating the system as a network of interconnected entities, this project aims to introduce new techniques to map and to trace the evolution of risk in the financial system, to forecast the spillover of risk between entities in the system, and to conduct counterfactual analysis of potenti ....Understanding the Linkage of Public and Private Risk in the Global Economy. This project aims to develop a richly detailed model of the global financial system including both public and private institutions. By treating the system as a network of interconnected entities, this project aims to introduce new techniques to map and to trace the evolution of risk in the financial system, to forecast the spillover of risk between entities in the system, and to conduct counterfactual analysis of potential policy measures. This project will investigate the link between spillover intensity and the existing research on extreme events in financial data. By studying how the recent crisis spread through the global financial system, this project aims to enhance our ability to foresee future crises and to mitigate their impact and costs.Read moreRead less
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
Estimating the effects of fiscal policy. This project will develop highly flexible models for estimating the effects of fiscal policy, as well as providing insight into how economic assumptions affect these estimates and which assumptions are supported by historical experience. The models and estimates will be useful for researchers, policymakers and businesses.
Analysis of Fiscal Policy Responses to Macroeconomic Conditions in Australia and the US using Real Time Data. This project investigates the evolution of Australian and US fiscal policy responses to macroeconomic conditions and examines the implications for future levels of public debt. A real time database of fiscal indicators will be constructed to capture information available to policymakers when making decisions. Econometric analysis of the data will involve a flexible approach that captures ....Analysis of Fiscal Policy Responses to Macroeconomic Conditions in Australia and the US using Real Time Data. This project investigates the evolution of Australian and US fiscal policy responses to macroeconomic conditions and examines the implications for future levels of public debt. A real time database of fiscal indicators will be constructed to capture information available to policymakers when making decisions. Econometric analysis of the data will involve a flexible approach that captures how policy has changed in its focus on economic stabilisation and fiscal sustainability. The analysis also allows for forecasts of public debt that take into account the interaction between policy and the economy. The results and methods will be useful in evaluating the stance of fiscal policy and its implications for the sustainability of public debt.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.