Australian Economic Review

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Latest documents

  • Surveying Lifelong Learning in the German National Educational Panel Study

    This article outlines the German National Educational Panel Study, which collects comprehensive data on lifelong learning in a multi‐cohort sequence design, covering early childhood, childhood, adolescence, young adulthood and adulthood. It outlines data collection for all the cohorts and educational phases across the life course whilst focusing on the educational stage ‘Adult Education and Lifelong Learning’. Data can be accessed for academic purposes as scientific use files under data contract.

  • Issue Information
  • Does Monetary Policy Respond to Uncertainty? Evidence from Australia

    We construct a novel measure of uncertainty using expert monetary policy recommendation data for Australia. Our results suggest that the Reserve Bank of Australia (RBA) tends to lower the cash rate when expert uncertainty is high. This result is robust to using other uncertainty measures.

  • Introduction
  • Optimal Monetary Policy in China with Money as Not Redundant

    This article provides three pieces of evidence to show that money is not redundant in China: aggregate real money balance can affect aggregate demand even when its effect through short‐term interest rates is controlled. I estimate a DSGE model using Chinese data. With the estimated model, I find that monetary policy that controls the money supply (the quantity rule) is better than the one that controls the short‐term interest rate (the price rule) in terms of minimising welfare loss. I then discuss the optimal monetary policy that combines both the price rule and the quantity rule.

  • The Influence of Climate on Migration

    This paper provides an overview of research into the phenomenon of whether climatic factors, such as temperature and weather‐related disasters, affect the decision to migrate. As an example, we examine migration flows from 198 countries to Australia for the time span from 1980 to 2015. Our results show that temperature does not have a robust, significant effect on migration flows, while weather‐related disasters do significantly affect flows to Australia.

  • Measuring Uncertainty for New Zealand Using Data‐Rich Approach

    This paper develops two state‐of‐the‐art uncertainty indices for New Zealand by exploiting two separate data‐rich environments. The first index follows the methodology outlined in Jurado, Ludvigson and Ng (2015) to construct an estimate of uncertainty based on a large New Zealand macro dataset. The second index is constructed based on freely accessible and real time Google Trends data to provide a real‐time and freely‐accessible measure of uncertainty as in Castelnuovo and Tran (2017) and Shields and Tran (2018). Both indices do a reasonable job measuring uncertainty in New Zealand. VAR evidence documents significant impacts of uncertainty shocks on GDP in New Zealand.

  • Tracing the Sources of South Australian Economic Slumps

    This article quantitatively investigates economic fluctuations in South Australia from 1990–2014. In particular, the study applies the business cycle accounting method to decompose the economic fluctuations into their sources. The main findings suggest that the low efficiency wedge was the primary source of South Australian economic slumps. Moreover, it is shown that infrastructural and R&D expenditures are important factors in explaining the variation of the efficiency wedge. This conforms with the fact that the South Australian Government is keen to support its development through the economic stimulus plan. Trade openness may also be a contributor.

  • Teaching Public Economics with Special Reference to Australian and US Cultures

    This article discusses how teaching public economics is, and should be, related to national cultures. The article shows how the US culture of distrust of government influences the two major US texts (Rosen and Gayer 2014; Gruber 2016) that dominate the teaching of public economics in Australia and elsewhere. By contrast, Stiglitz and Rosengard's (2015) text on public economics emphasises the role of government in providing social welfare. These traditions may be described as neo‐liberal and social democratic respectively. I conclude that the social democratic approach reflects Australian culture and is more appropriate for teaching public economics in Australian universities.

  • Yield Curve and Financial Uncertainty: Evidence Based on US Data

    How do short‐ and long‐term interest rates respond to a jump in financial uncertainty? We address this question by conducting a local projections analysis with US monthly data, period: 1962–2018. The state‐of‐the‐art financial uncertainty measure proposed by Ludvigson, Ma and Ng (2019) is found to predict movements in interest rates at different maturities. In particular, an increase in financial uncertainty is found to trigger a negative and significant response of both short‐ and long‐term interest rates. The response of the short end of the yield curve (i.e., of short‐term interest rates) is found to be stronger than that of the long end (i.e., of long‐term ones). In other words, a financial uncertainty shock causes a temporary steepening of the yield curve. This result is consistent, among other interpretations, with medium‐term expectations of a recovery in real activity after a financial uncertainty shock.

Featured documents

  • Teaching Public Economics with Special Reference to Australian and US Cultures

    This article discusses how teaching public economics is, and should be, related to national cultures. The article shows how the US culture of distrust of government influences the two major US texts (Rosen and Gayer 2014; Gruber 2016) that dominate the teaching of public economics in Australia and...

  • Violence in the Household and Happiness in Mexico

    This article has two purposes: first to investigate whether violence influences wellbeing; second to investigate whether the effect of violence is greater for women than for men. The results show that there is a significant impact on the wellbeing of individuals when suffering violence from someone ...

  • 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...

  • 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...

  • 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...

  • A Survey of the Privatisation of Government‐Owned Enterprises in Australia since the 1980s

    In this article, a survey is provided of the privatisation of government‐owned enterprises in Australia since the 1980s. In particular, the article evaluates the evidence that has been compiled on the success or failure of privatisation in enhancing efficiency in various industry sectors. In terms...

  • 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...

  • How Monetary Policy Affects Your Gross Domestic Product

    During the financial crisis, monetary policy was loosened significantly. Debate continues about the extent to which low interest rates and quantitative easing (QE) may have had adverse distributional impacts, whether by income, wealth, age or region. Using quantified simulations on micro data, I...

  • How Uncertain Are Long‐Run Fiscal Projections? Non‐Parametric Stochastic Modelling for New Zealand

    This article introduces uncertainty into a fiscal projection model which incorporates population ageing along with a number of feedback effects. A new non‐parametric method of producing stochastic projections is explored. This allows for the complex nature of the observed joint distributions of...

  • Cryptocurrencies and Digital Fiat Currencies

    Current generations of cryptocurrencies are not money, but future ones may be. While Bitcoin performs poorly as a store of value, it is actually on par with the Venezuelan bolívar over the last decade, and the Argentinian peso over the decade from 1986. I evaluate arguments in favour of central...

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