Investing over the Life Cycle. This project will investigate efficiency questions raised by the private and public management of assets within defined contribution pension plans. Because investment risk in such plans falls on the contributing household, they need to be managed with care. The first phase of the project will examine optimal equity investments on behalf of contributing households. The second phase will consider the scope and limits of market-timing endeavours involving switches bet ....Investing over the Life Cycle. This project will investigate efficiency questions raised by the private and public management of assets within defined contribution pension plans. Because investment risk in such plans falls on the contributing household, they need to be managed with care. The first phase of the project will examine optimal equity investments on behalf of contributing households. The second phase will consider the scope and limits of market-timing endeavours involving switches between broad asset classes. The third phase will consider optimal currency hedging. The final phase will consider the optimal taxation of pension fund assets at different points in the household's life cycle.Read moreRead less
The Role of a Central Bank’s Balance Sheet in Shaping the Economy. In response to the global financial crisis, the world’s major central banks cut their rates to near zero and implemented untested unconventional monetary policies, significantly expanding the size and composition of their balance sheets. More than a decade later, the Reserve Bank of Australia is considering similar balance sheet policies. This proposal aims to develop various frameworks that can be used to simulate and evaluate w ....The Role of a Central Bank’s Balance Sheet in Shaping the Economy. In response to the global financial crisis, the world’s major central banks cut their rates to near zero and implemented untested unconventional monetary policies, significantly expanding the size and composition of their balance sheets. More than a decade later, the Reserve Bank of Australia is considering similar balance sheet policies. This proposal aims to develop various frameworks that can be used to simulate and evaluate when and how to eventually undo unconventional monetary policies in order to prevent a prolonged recession. Thus this research proposal will contribute to the current Australian monetary policy debate while providing some insights on how best to implement such policies, improving the living standards of Australians.Read moreRead less
Lifetime Approach to Measuring Inequality in Living Standards in Australia . This project aims to develop a new methodology to study trends in inequality in Australia. It expects to advance the body of knowledge by measuring inequality in living standards over the whole lifetime and by identifying the role of the Australian fiscal system in redistributing lifetime resources across households and generations. This new approach would help clarify the potential bias embedded in commonly used inequa ....Lifetime Approach to Measuring Inequality in Living Standards in Australia . This project aims to develop a new methodology to study trends in inequality in Australia. It expects to advance the body of knowledge by measuring inequality in living standards over the whole lifetime and by identifying the role of the Australian fiscal system in redistributing lifetime resources across households and generations. This new approach would help clarify the potential bias embedded in commonly used inequality indicators based on current-year income. Its findings expect to provide new insights into how the gains from economic growth have been shared among Australians. It should also offer policy options for designing a better tax and transfer system that would sustain economic prosperity and fairness in Australia.Read moreRead less
Government, Institutions and Economic Activity: A Long Term Analysis. Using national and regional data for 30 to 50 countries over multiple centuries, this project will examine the effects of itemised government expenditure and revenue on productivity, investment, saving, labour force participation and research and development. The results are expected to shed light on the macroeconomic effects of different revenue and spending categories (education, transfers, and so on). In addition, the proje ....Government, Institutions and Economic Activity: A Long Term Analysis. Using national and regional data for 30 to 50 countries over multiple centuries, this project will examine the effects of itemised government expenditure and revenue on productivity, investment, saving, labour force participation and research and development. The results are expected to shed light on the macroeconomic effects of different revenue and spending categories (education, transfers, and so on). In addition, the project aims to determine which factors have been responsible for the increase of government size over the past two centuries. The results aim to further reveal which government revenue and expenditure items are most conducive to economic welfare and growth.Read moreRead less
Optimal Tax Policy Meets Modern Labour Supply Theory. This project aims to generate new evidence on the optimal design of the federal tax system. Specifically, it seeks to determine the optimal combination of taxes on income, capital and consumption to raise necessary revenue while minimizing disincentives for work and capital formation. The project is innovative because, for the first time, it does optimal tax calculations using models that account fully for how taxes affect human capital inves ....Optimal Tax Policy Meets Modern Labour Supply Theory. This project aims to generate new evidence on the optimal design of the federal tax system. Specifically, it seeks to determine the optimal combination of taxes on income, capital and consumption to raise necessary revenue while minimizing disincentives for work and capital formation. The project is innovative because, for the first time, it does optimal tax calculations using models that account fully for how taxes affect human capital investment and labour force participation. It aims to enhance or understanding of the optimal mix between taxes on earnings, capital and consumption, and the optimal degree of income tax progressivity. The benefit is a tax system better designed to promote economic efficiency and human capital formation. Read moreRead less
Understanding market mechanisms and determinants of transaction costs to achieve greater efficiency in Australian fixed-income markets. This project will provide information to policymakers and regulators, enabling the evolution of optimal fixed-income markets, with significant benefits for individuals and the national economy. These benefits will be both short-term (current wealth) and long-term (retirement saving). It will promote Australia as the leader in constructing optimal fixed-income ma ....Understanding market mechanisms and determinants of transaction costs to achieve greater efficiency in Australian fixed-income markets. This project will provide information to policymakers and regulators, enabling the evolution of optimal fixed-income markets, with significant benefits for individuals and the national economy. These benefits will be both short-term (current wealth) and long-term (retirement saving). It will promote Australia as the leader in constructing optimal fixed-income markets, which can be applied to similar markets around the world. Finally, training research students will develop research infrastructure in Australia, and contribute to produce a generation of specialists who will increase Australia's international standing in financial research and its ability to manage an increasingly complex economy.Read moreRead less
International Trade Policy Evaluation, Economic Growth and Demographics. The research will strengthen our understanding of Australia's place in the region and the world. Given Australia's dependence upon international trade, the importance of economic growth and demographic change, the relevance of inter-generation welfare and the challenges arising from globalization and the international trade policy environment, knowledge of the power and implications of international trade policies is crucia ....International Trade Policy Evaluation, Economic Growth and Demographics. The research will strengthen our understanding of Australia's place in the region and the world. Given Australia's dependence upon international trade, the importance of economic growth and demographic change, the relevance of inter-generation welfare and the challenges arising from globalization and the international trade policy environment, knowledge of the power and implications of international trade policies is crucial. This research will provide an analytical framework that will better inform policy makers and analysts and contribute to better understanding of Australia's options and role in the international trade policy arena. The result will be better trade policy choices.Read moreRead less
Policy Modelling for Ageing in Emerging Economies: The Case of Indonesia. This project, in collaboration with the World Bank and the Indonesian Planning Authority, will support major social and economic policy development in a rapidly ageing region. It will break new ground by developing a cutting-edge economic policy model reflecting salient features of ageing in emerging economies, taking into account the wider implications for education, employment, formalisation, growth, and retirement. It w ....Policy Modelling for Ageing in Emerging Economies: The Case of Indonesia. This project, in collaboration with the World Bank and the Indonesian Planning Authority, will support major social and economic policy development in a rapidly ageing region. It will break new ground by developing a cutting-edge economic policy model reflecting salient features of ageing in emerging economies, taking into account the wider implications for education, employment, formalisation, growth, and retirement. It will bring the armoury of policy analysis instruments available to these countries up to the standard now enjoyed by the developed world. Indonesia, on the brink of major pension reform, will be used as a test bed. Data sets will be developed to allow the model structure to be applied to other emerging economies in Asia. Read moreRead less
Supporting Entry and Growth of Australian Businesses via Tax and Transfers. This project aims to characterise the optimal tax treatment of business income for insurance and efficiency purposes. Using new data for Australia, the project expects to first identify key determinants of businesses creation, growth and exit, before and after COVID-19. In light of those determinants, the project expects to develop original macroeconomic models integrating firm dynamics into optimal taxation frameworks. ....Supporting Entry and Growth of Australian Businesses via Tax and Transfers. This project aims to characterise the optimal tax treatment of business income for insurance and efficiency purposes. Using new data for Australia, the project expects to first identify key determinants of businesses creation, growth and exit, before and after COVID-19. In light of those determinants, the project expects to develop original macroeconomic models integrating firm dynamics into optimal taxation frameworks. Expected outcomes include formulating fiscal policies that provide adequate stimulus to businesses, by balancing public insurance and income inequality. This should deliver evidence-based inputs to promote Australia's post-pandemic recovery, through the design of a fairer and more efficient business tax and transfer system.Read moreRead less
Talent Mismatch: Evidence from Australian Administrative Tax Records. The project aims to study the skill composition of the Australian workforce. Changes in the macroeconomic and technology environments make it hard to predict skill shortage. The project expects to develop macroeconomic models quantifying skill-mismatch of university graduates, identify sources of mismatch, highlight gender and generational differences, and estimate associated costs to Australia. The expected outcomes are to he ....Talent Mismatch: Evidence from Australian Administrative Tax Records. The project aims to study the skill composition of the Australian workforce. Changes in the macroeconomic and technology environments make it hard to predict skill shortage. The project expects to develop macroeconomic models quantifying skill-mismatch of university graduates, identify sources of mismatch, highlight gender and generational differences, and estimate associated costs to Australia. The expected outcomes are to help shape policy recommendations on the funding of tertiary education in a changing economic climate. This should provide significant benefits to Australians, as policies shaping the tertiary education system affect individual income and the aggregate economy by determining labour supply and taxpayers' financial burden.Read moreRead less