Economic modelling for Australia and the USA: forecasts, policy analysis and comparative studies of technology and labour market adjustment. This project involves: a fundamental overhaul of MONASH, a widely used detailed dynamic model of the Australian economy; the creation of MONASH-USA for the United States; and several model-based Australia/US comparisons. MONASH's database and parameters will be updated, and its theoretical specification improved. MONASH-USA will be an advance over existing ....Economic modelling for Australia and the USA: forecasts, policy analysis and comparative studies of technology and labour market adjustment. This project involves: a fundamental overhaul of MONASH, a widely used detailed dynamic model of the Australian economy; the creation of MONASH-USA for the United States; and several model-based Australia/US comparisons. MONASH's database and parameters will be updated, and its theoretical specification improved. MONASH-USA will be an advance over existing US models and will generate policy results of interest both in the United States and Australia. MONASH-USA will have an excellent database and is likely to produce insights on parameter estimation. These will be applicable in Australia. Together, MONASH and MONASH-USA will facilitate comparative studies of technology and labour-market performance.Read moreRead less
Monetary-fiscal policy interactions and their effect on economic performance: new theory, empirics, and an application to Australia. Both fiscal and monetary policy are powerful tools that affect the wellbeing of individuals. Even if current policies are 'responsible', the social cost of uncertainty about the future is extremely high - to which the 2004 'high interest rates under Labour' election campaign or current heated fiscal debates in the US and EU testify. Our analysis will contribute to ....Monetary-fiscal policy interactions and their effect on economic performance: new theory, empirics, and an application to Australia. Both fiscal and monetary policy are powerful tools that affect the wellbeing of individuals. Even if current policies are 'responsible', the social cost of uncertainty about the future is extremely high - to which the 2004 'high interest rates under Labour' election campaign or current heated fiscal debates in the US and EU testify. Our analysis will contribute to the reduction of the social cost by identifying the institutional setting that is robust to 'bad' policymakers, i.e. one in which socially optimal policies are 'institutionalized' (legislated) rather than resting with individuals. Such arrangements are further likely to stimulate investment and economic growth.Read moreRead less
Technological innovation, trade liberalization, unemployment, and policy design. Australia, like all economies, is heavily influenced by technological changes and shifting trade patterns. Understanding these influences, and the impact they have on the distribution of income, the unemployment rate, and the job mix, is very important for the design of appropriate policy initiatives. The proposed research aims to achieve exactly this by developing a mathematical model which incorporates technologic ....Technological innovation, trade liberalization, unemployment, and policy design. Australia, like all economies, is heavily influenced by technological changes and shifting trade patterns. Understanding these influences, and the impact they have on the distribution of income, the unemployment rate, and the job mix, is very important for the design of appropriate policy initiatives. The proposed research aims to achieve exactly this by developing a mathematical model which incorporates technological change, trade, and unemployment. The model will be used to analyse the effects of these changes and, thus, to design optimal policy. The results from this project should also stimulate policy discussions both within Australia and abroad - enriching academic relations between domestic and international universities.Read moreRead less
Understanding the Effects of News Shocks on Macroeconomic Fluctuations. There are significant potential benefits for Australia. First, it could lead to more effective policymaking, with an understanding of how policy in one branch of the government can affect other sectors that have not been considered before. For example, changes in fiscal policy can affect not just growth, but also unemployment, inflation, and the income distribution. Second, this project will make a contribution to the resear ....Understanding the Effects of News Shocks on Macroeconomic Fluctuations. There are significant potential benefits for Australia. First, it could lead to more effective policymaking, with an understanding of how policy in one branch of the government can affect other sectors that have not been considered before. For example, changes in fiscal policy can affect not just growth, but also unemployment, inflation, and the income distribution. Second, this project will make a contribution to the research training of new macroeconomists in Australia: we will train three PhD students in the very latest methods. We also will organize a conference and bring the very top economists in the world to work with researchers here, and to consider issues surrounding the Australian economy. Read moreRead less
State & territory economic performance and national economic policy. The research is intended to provide a better understanding of the relationship between national and state & territory economic behaviour in Australia and the relative strengths of common and idiosyncratic factors affecting economic performance across the states and territories. The results of the research will help to inform both national and sub-national economic policies and hence contribute to better economic and social outc ....State & territory economic performance and national economic policy. The research is intended to provide a better understanding of the relationship between national and state & territory economic behaviour in Australia and the relative strengths of common and idiosyncratic factors affecting economic performance across the states and territories. The results of the research will help to inform both national and sub-national economic policies and hence contribute to better economic and social outcomes in Australia.Read moreRead less
Evaluating the sources of growth and decline in Australia's State economies via historical/decomposition simulations with a dynamic multiregional fiscal model. Australia's State economies have experienced wide disparities in economic growth rates. Little research has been undertaken on the underlying forces responsible for this. Nevertheless, State and Commonwealth governments spend several $billion annually on policies with the ostensible aim of promoting State growth. Disparities in growth ....Evaluating the sources of growth and decline in Australia's State economies via historical/decomposition simulations with a dynamic multiregional fiscal model. Australia's State economies have experienced wide disparities in economic growth rates. Little research has been undertaken on the underlying forces responsible for this. Nevertheless, State and Commonwealth governments spend several $billion annually on policies with the ostensible aim of promoting State growth. Disparities in growth rates also contribute to potentially costly movements in population, and (by promoting perceptions of unequal outcomes from policy change) may hinder the inter-government cooperation required for many beneficial policy changes. This project aims to develop a dynamic 8-region CGE model of Australia, and use it to investigate the causes of relative state economic performance.Read moreRead less
Lifelong Education and Health Investment: Implications for Life Expectancy, Economic Growth and Public Policy. This project will provide Australian policymakers a clear picture of the complex interaction between various policy instruments including subsidies on health and education and income support for retirees and children on the one hand, and socioeconomic outcomes including saving rates, labour participation, productivity, fertility, life expectancy and inequality on the other hand. This kn ....Lifelong Education and Health Investment: Implications for Life Expectancy, Economic Growth and Public Policy. This project will provide Australian policymakers a clear picture of the complex interaction between various policy instruments including subsidies on health and education and income support for retirees and children on the one hand, and socioeconomic outcomes including saving rates, labour participation, productivity, fertility, life expectancy and inequality on the other hand. This knowledge can be used to frame government policies in the areas of health, education, superannuation and pension, and family support. In particular, the project will inform policymakers about the mix of private and public funding of the health system that can produce better health and social outcomes.Read moreRead less
An Improved Framework for Analysing the Fiscal Implications of Population Ageing. The Commonwealth Government's 'National Strategy for an Ageing Australia' explicitly acknowledged the potential for intergenerational conflict in Australia as relatively fewer young people must provide for the consumption of a growing proportion of retired people. The Intergenerational Report (IGR) in 2002 was an important step in national planning to avoid such a conflict. The proposed project seeks to address maj ....An Improved Framework for Analysing the Fiscal Implications of Population Ageing. The Commonwealth Government's 'National Strategy for an Ageing Australia' explicitly acknowledged the potential for intergenerational conflict in Australia as relatively fewer young people must provide for the consumption of a growing proportion of retired people. The Intergenerational Report (IGR) in 2002 was an important step in national planning to avoid such a conflict. The proposed project seeks to address major shortcomings in the IGR and provide an improved framework for future IGRs. The project addresses two Priority Goals within the Designated National Research Priority 2. These are: 'Ageing well, ageing productively' and 'strengthening Australia's social and economic fabric'.Read moreRead less
Risk Management for Bonds, Currencies and Commodities. Understanding maturity-structure policy is a neglected topic. It needs research before we can determine whether public debt policy should accommodate the emerging needs of self-funded retirees - for long-term debt, new issues of index bonds, and 'survivor' bonds. Planning for annuity-rate risk has lagged far behind the sales of complying pensions. Over 2003 the Australian dollar rose by 34 percent, revealing major deficiencies in the standar ....Risk Management for Bonds, Currencies and Commodities. Understanding maturity-structure policy is a neglected topic. It needs research before we can determine whether public debt policy should accommodate the emerging needs of self-funded retirees - for long-term debt, new issues of index bonds, and 'survivor' bonds. Planning for annuity-rate risk has lagged far behind the sales of complying pensions. Over 2003 the Australian dollar rose by 34 percent, revealing major deficiencies in the standard advice on managing currency risks to retirement incomes. Uninsured disruptions to electricity supply have been an issue (eg in California), and demonstrate a need for innovative financial instruments that cushion and spread the costs.Read moreRead less
How does the Structure of Government, in Particular the Extent of Fiscal Decentralisation, Affect Long Term Economic Performance in Australia? The research analyses how Australia should best structure its government to maximise long-term economic performance in terms of economic growth and the optimal provision of public goods such as health, education and other public infrastructure. The optimal division of revenue raising and spending responsibilities between the federal government, State gove ....How does the Structure of Government, in Particular the Extent of Fiscal Decentralisation, Affect Long Term Economic Performance in Australia? The research analyses how Australia should best structure its government to maximise long-term economic performance in terms of economic growth and the optimal provision of public goods such as health, education and other public infrastructure. The optimal division of revenue raising and spending responsibilities between the federal government, State governments and other sub-national bodies like city and regional councils will be rigorously assessed from an economic perspective. The research will lead to recommendations regarding improvements in the structure of Australia's government sector, particularly the extent and nature of fiscal decentralisation, capable of improving productivity and future living standards.Read moreRead less