Economic Papers最新文献

The industry diversity thesis of economic resilience to economic shocks is embedded in community development policy across Australia. The idea being that in the event of an economic shock some industries will prove more recession-proof than others. The greater the industry diversity, the greater the likelihood of off-setting industry effects, resulting in greater economic resilience. The COVID-19 pandemic and the associated restrictions created a unique natural experiment to explore whether the industry diversity thesis holds true under the conditions of a global health pandemic. In this policy paper, we use JobKeeper applications as a proxy for decreased economic resilience. We explore if Australian local government areas (LGAs) with higher industry diversity had less necessity for JobKeeper. We also briefly consider if concentrations of certain industries acted as a better economic buffer to the COVID-19 economic shock. We observe that as diversity increases, economic resilience strengthens except for Victoria (where the association is inverted). This observation has important implications for current and future policy formation and implementation across all layers of government.

Recent research has documented the immediate negative impact of the COVID-19 pandemic on household and business consumption, but there is still limited investigation into the medium-term effects in specific consumption categories. This paper addresses this gap using a vector autoregression analysis of a system of aggregated consumer final demand across Australia. We highlight the importance of studying a demand system, as opposed to investigating independent consumption categories, due to the interactive evolution of consumption during the pandemic. Modelling the paths of various consumption categories in response to shocks from one another, we find that, despite the large and abrupt shocks to consumption during the first two quarters of 2020, most categories reverted to pre-COVID levels when restrictions were lifted. Importantly, transportation had the largest and most persistent decline. Overall, shocks to sectors other than food, alcohol and education were outside the counterfactual forecast confidence intervals estimated based on pre-COVID information.

This article introduces the Bayesian structural time series (BSTS) as a potential tool for forecasting in the tourism literature. Using data on Australian tourist arrivals in New Zealand, the forecasting accuracy of the estimated model is evaluated using a fixed partitioning approach. The MAPE of the fitted model is 3.11 per cent for the validation stage and 2.75 per cent for the test stage. The BSTS outperforms two other competing models both in the validation and test stage. In addition to forecasting, BSTS also estimates the trend, trend slope, and seasonality that change over time.

This paper analyses the COVID recession and the large fiscal policy response by modelling scenarios using a macro-econometric model. The COVID recession mainly arose from lower household consumption of certain services under COVID social distancing. The fiscal response to compensate for income losses in those service industries meant that unemployment was around 2 percentage points lower for 3 years than otherwise would have been the case. However, there was over-compensation: for every $1 of income the private sector lost under COVID, fiscal policy provided $2 of compensation. Following the end of social distancing, the aftereffects of over-compensation and over-prolonged loose monetary policy are modelled to have generated excess demand that temporarily added up to 3 percentage points to the annual inflation rate. Also, three forms of over-compensation in the JobKeeper program that led the fiscal response created disincentive effects and inequities. The primary lesson for future pandemics is that fiscal policy should compensate, but not over-compensate, for income losses, both in aggregate and at the program level. The secondary lesson is that monetary policy needs to take more account of the stimulus already provided by the fiscal response, so that interest rates do not remain very low for too long.

This study examines inflation dynamics in Indonesia, a large archipelagic country, using the Phillips curve specification. Utilising province-level data from 2015 to 2019, the analysis accounts for regional interaction across Indonesian provinces and estimates spatial spillovers. To address the challenges of applying spatial methods to the world's largest archipelagic nation, two new approaches for the spatial weight matrix criteria are introduced: contiguity-based from artificial boundaries (Thiessen polygons) and trade-based from the Interregional Input–Output Tables. Furthermore, exploiting a new dataset, the study contrasts alternative measurements of inflation and output gap. These distinctions yield new findings. The results indicate the presence of a conventional Phillips curve in Indonesia. Different measures of inflation and the output gap have distinct spatial spillover effects.

The paper attempts to analyse the grotesque dimensions of gender disparity of lockdown as a policy response to the pandemic crisis. In doing so, we develop a multi-sectoral distortion-ridden general equilibrium model which applies to small open developing economies. Lockdown results in supply-chain disruptions (SCDs), physical restrictions on labour gathering, adverse demand shock and an escalation of demand for the high-skilled capital-intensive product. Not only factor intensity ranking but also contact intensity of sectors has several dimensions. These dimensions include inter alia female labour force participation, the burden of unpaid domestic chores on women and gender wage disparity with unemployment as well.

Prior research has identified outward-oriented policies as a far superior approach to achieving economic growth. Whilst trade openness determines economic growth in the short run, institutional quality is critical to long-term viability. However, the direct and indirect effects of institutions have been understudied, particularly for the Brazil, Russia, India, China and South Africa. This study addresses this issue by estimating long-run and short-run elasticities using the system GMM and pooled mean group models and identifying its country-specific impact using the fully modified ordinary least square model. According to the findings, trade and institutions are only short-run complements of economic growth. In the long run, however, the lack of good governance limits the positive impact of trade openness.

We examine the effect of COVID-19-induced lockdown on the profitability of listed firms in India. We use quarterly income statement of 4168 listed firms for the period between April–June 2020 quarter and April–June 2022 quarter and compare their financial data with previous quarters (2015–2019). Using a difference-in-difference estimation framework and various profitability measures, we find that the COVID-19 lockdown has reduced profits by around 15 per cent for listed firms in India. Our results are robust to various robustness tests and alternate specifications. We find evidence of firms losing revenues more than expenses, thus leading to decline in profits. The main effect is conditioned by firm-specific factors. Specifically, firms that are smaller, older, unlisted and that do not belong to any group witnessed larger decline in profitability due to lockdown. Additionally, the effect of lockdown is more pronounced in areas that had lower mobility and higher COVID-19 spread. These results underscore the importance of institutional factors and pre-existing firm characteristics in conditioning the impact of lockdown on firm profitability.

I discuss how electric vehicles (EVs) link transportation externalities to the regulations that govern our electricity markets. Specifically, I contrast the consequences of the incentives faced by joint EV and residential PV adopters under a system of monthly net metering to those under a system of instantaneous metering with feed-in tariffs and behind-the-meter own consumption. I also discuss how, even within Australia, households under new solar PV contracts and early adopters under legacy contracts face very different private costs of operating EVs, which have environmental and congestion implications. I briefly discuss how these incentives interact with the profitability and environmental benefit of household battery systems. Finally, I comment on how these short-term incentives are likely to evolve in the longer run transition to a much cleaner grid and warn about the potential negative distributional impacts of using purchase subsidies to accelerate the adoption of these technologies.

This paper offers a plain model to organise thinking about the disinflation policy. It exploits the insight that monetary and fiscal policy are intertwined. The model links inflationary expectations, monetary policy and fiscal policy, and contemplates a disinflation policy consisting of two plans, not necessarily connected: a monetary plan and a fiscal plan. The central question examined is which type of policy generates a lower policy interest rate – a monetary plan without fiscal cooperation or a monetary plan with fiscal austerity? The economic logic articulated by the model generates the following answer: the equilibrium policy rate set by the central bank can always be brought down by reducing the budget deficit. This qualitatively unambiguous prediction may be dependent on silent omissions, which are briefly discussed at the end of the paper.