Australian Economic Review
- Publication date:
- Nbr. 53-3, September 2020
- Nbr. 53-2, June 2020
- Nbr. 53-1, March 2020
- Nbr. 52-4, December 2019
- Nbr. 52-3, September 2019
- Nbr. 52-2, June 2019
- Nbr. 52-1, March 2019
- Nbr. 51-4, December 2018
- Nbr. 51-3, September 2018
- Nbr. 51-2, June 2018
- Nbr. 51-1, March 2018
- Nbr. 50-4, December 2017
- Nbr. 50-3, July 2017
- Nbr. 50-2, June 2017
- Nbr. 50-1, March 2017
- Nbr. 49-4, December 2016
- Nbr. 49-3, September 2016
- Nbr. 49-1, March 2016
- Nbr. 49-2, February 2016
- Nbr. 48-4, December 2015
- Sectoral Employment Dynamics in Australia and the COVID‐19 Pandemic
We develop a multivariate time series model of employment in 19 sectors for Australia. We use this model to determine the long‐run effect of a 1% increase in economic activity in any chosen sector on aggregate employment. Our findings point to manufacturing and construction sectors as those that generate the largest positive spillovers for the aggregate economy. Moreover, we provide an interactive web‐based app that produces our model's forecasts based on any user‐specified scenario. As the restrictions associated with the COVID‐19 pandemic evolve, the sectoral employment multipliers together with these interactive tools will provide useful information for policymakers.
- Is Trade Liberalisation Pro‐Poor in Pakistan? Evidence from Large‐Scale Manufacturing
This article aims to analyse the impact of industry‐level trade liberalisation (measured through industry‐specific tariff rates) on poverty in Pakistan. Combining data for tariff rates with the Labour Force Survey of Pakistan, we use quantile regression analysis to estimate the impact of changes in tariff rates on workers’ wages (associated with the manufacturing sector of Pakistan) that are at different points of the income distribution. Our findings meaningfully signal that trade liberalisation helps to reduce poverty in the economy. Based on these results, this study provides policy recommendations to reap maximum benefits from trade liberalisation.
In this paper I adapt a common model used in economics to study the diffusion of innovations to model the transmission of a virus. Emphasis is placed on the evolution of the number of new infections and the cumulative total number of infections over time and how they might be influenced by different policies. Although the model is very simple it does yield some useful implications for public policy.
- Issue Information
- Non‐Standard Employment and Wage Growth in Australia
Using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and after restricting attention to employees, we observe an increase over time in the non‐standard employment share, all of which is concentrated in the period since 2009. Further, we find clear evidence that employees in non‐standard forms of employment have experienced relatively low rates of growth in hourly wages when compared with permanent full‐time employees. Nevertheless, decomposition analysis suggests that changes in workforce composition by employment type have had a very small (and insignificant) impact on the overall rate of wage growth in recent years.
- An Examination of Public Hospital Productivity and its Persistence: An Index Number Approach
This paper measures the level and growth of total factor productivity (TFP) of public hospitals in Victoria, Australia, using an index number approach. We further examine the persistence of productivity over time, and the extent to which productivity varies with hospital characteristics such as hospital size. Hospital administrative data from Victoria from 2007–08 to 2011–12 are used. We find substantial variation in TFP across hospitals: large hospitals perform significantly better than small hospitals, both in TFP level and growth. Productivity level is highly persistent over time, but not productivity growth.
- Macroeconomic Policy to Aid Recovery after Social Distancing for COVID‐19
Using the Keynesian model set out in McDonald (2020), in which downward wage rigidity is supported by worker loss aversion with respect to wages, this article shows that a period of social distancing (SD) can leave a post‐SD economy with both stimulatory and depressive effects. A loss of productive capacity is stimulating. Costs of restarting firms, lower labour productivity when restarted and a desire to restore wealth from debt incurred during the period of SD are depressive. If, as seems highly probable, the net effect on economic activity is negative then a fiscal expansion can restore activity. To avoid an increased government budget deficit, this expansion would probably require an increased tax rate. Reductions in real wages may also be necessary. A desire to balance the government budget combined with no increase in the tax rate would be unfortunate, because it would cause a further contraction in activity from its post‐SD level.
- The ATO Longitudinal Information Files (ALife): A New Resource for Retirement Policy Research
The Australian Taxation Office release of annual longitudinally linked individual tax and superannuation records, known as the ATO Longitudinal Information Files (ALife), opens up opportunities for new research. In this study, we provide an overview of ALife, focusing on its use for retirement income research. To this end, we provide the first longitudinal estimates of superannuation outcomes for 1‐year birth cohorts. Results show marked increase in disparity of super balances in the lead‐up to retirement as those in the top quartile ramp‐up their contributions, possibly to take advantage of the favourable tax treatment of superannuation income in retirement years.
- The Australian Labour Market and the Early Impact of COVID‐19: An Assessment
From March to June 2020 was the most dramatic four months in the history of the Australian labour market. Never before has a such a substantial decrease in labour demand (and partial reversal) occurred so quickly. In this article, we present an overview of the early impact of COVID‐19: the main drivers it brought into play and the consequent labour market developments. Aggregate effects and how impacts differed by type of job and worker are described. We conclude with a brief review of the main government response to COVID‐19, the JobKeeper program.
- The Cost of Coronavirus Uncertainty: The High Returns to Clear Policy Plans
Policymakers face an extremely uncertain environment during COVID‐19. Using a nonlinear VAR estimate for the Euro Area, we argue that the benefit of reducing policy uncertainty at a time dominated by pessimistic expectations amounts to several points of GDP. The impact on the economy of uncertainty shocks is much larger during periods of negative outlook for the future. We estimate the impact on industrial production of the current COVID‐19 induced uncertainty to peak at a year‐over‐year growth loss of −15.4 per cent in September 2020, and to lead to a fall in CPI inflation between 1 per cent and 1.5 per cent. Policies providing state‐contingent scenarios ready to be adopted if the worst‐case outcomes materialise can reduce the impact of uncertainty.
- Australia after the Asian Century White Paper
Prime Minister Julia Gillard released the ‘Australia in the Asian Century’ White Paper in October 2012, describing it as ‘a roadmap showing how Australia can be a winner in the Asian Century’. This article provides a review of Australia's progress on engagement with Asia 2 years after the White...
- When Does Electricity Price Cap Regulation Become Distortionary?
Australia has a deregulated national wholesale electricity market, a national network regulatory framework, but inconsistent state‐based regulated retail price caps in workably competitive markets. This article finds that asymmetric information and the complexity of energy markets means that a...
- Service Oligopolies and Australia's Economy‐Wide Performance*
Australia's services industries now contribute almost four‐fifths of gross domestic product. The microeconomic reforms of the 1990s left behind numerous regulated private service oligopolies that contribute one‐quarter. Using an economy‐wide modelling approach that represents service oligopoly...
- Is Trade Liberalisation Pro‐Poor in Pakistan? Evidence from Large‐Scale Manufacturing
This article aims to analyse the impact of industry‐level trade liberalisation (measured through industry‐specific tariff rates) on poverty in Pakistan. Combining data for tariff rates with the Labour Force Survey of Pakistan, we use quantile regression analysis to estimate the impact of changes in ...
- Challenges Facing the World Trade Organization: An Overview
Tensions are running high in the world trading system. Sufficient conditions now exist for a continuing degeneration of trading relations creating a downward spiral and launching a serious trade war with unknown consequences. History has shown this scenario can be avoided if trading relations are...
- Towards Understanding Macrofinancial Impacts of Loan‐to‐Value Ratio Policy in New Zealand: A General Equilibrium Perspective
We use a dynamic stochastic general equilibrium model as a framework for thinking about the transmission mechanism of loan‐to‐value macroprudential policy. We analyse the key channels through which the caps on loan‐to‐value ratios work to limit the speed of asset and credit cycles. We further...
- Agency Theory and Financial Planning Practice
We extend an influential contribution to the literature on agency theory and then use this extension, along with other theoretical contributions, to shed light on agency problems affecting funds management and financial planning in Australia. The case for pure fee‐for‐service in actively managed...
- The Consequences of Retail Electricity Price Rises: Rethinking Customer Hardship
The Australian energy sector is nearing the end of an investment megacycle, which has driven above‐trend electricity tariff increases. In this article, we combine energy market and demographic data and find that the dominant thought on customer hardship, aged pensioners, pales into insignificance...
- Dynamic Pricing and the Peak Electricity Load Problem
Reforms to Australia's 45,000 MW electricity market were met with remarkable success, but wholesale market gains have been largely exhausted. Above‐trend growth in investment in energy infrastructure is driving retail prices to levels that triggered the sectoral assault in the first place. This...
- The Governance of a Fragile Eurozone
When entering a monetary union, member countries change the nature of their sovereign debt in a fundamental way; that is, they cease to have control over the currency in which their debt is issued. As a result, financial markets can force these countries’ sovereigns into defaulting. This makes the...