Australian Economic Papers最新文献

This editorial captures the history of immense contributions that Judy Yates AM has made to the discipline of housing economics. It traces her legacy and combines notes of personal appreciation by two international colleagues that Judy worked closely with during her lifetime.

Foster, G., & Frijters, P. (2024). Hiding the elephant: The tragedy of COVID policy and its economist apologists. Australian Economic Papers, 63(1), 106–144. https://doi.org/10.1111/1467-8454.12293.

In tab. A2 of the appendix, the line identifying economist Ben Phillips of the ANU as an ‘extremist’ was incorrect. The Ben Phillips being quoted in the AFR article that led to the creation of this entry in the table is, in fact, a biologist at the University of Melbourne. The amended versions of tab. A2 and tab. A3 should exclude the rows (one row in each table) containing Ben Phillips' name.

This correction also changes the counts of ‘extremist’ views expressed by economists reported in the main body of the paper, as follows:

‘Thirty-six of the entries in Table A2 were of the extremist persuasion’ (‘thirty-six’ should be ‘thirty-five’); ‘Among the 36 extremist contributions’ (‘36’ should be ‘35’).

We apologise for this error.

In the field of international finance, there is a large role for international financial market integration and financial depth by contributing to the global financial system and enhancing financial system power through easier access to sufficient funds of government and private sectors. This research aims to determine the short-run and long-run impact of financial depth on international financial market integration in eight selected countries over the period of 1980–2021 in both a linear and nonlinear model, while providing the opportunity to assess the asymmetric impact of financial depth on international financial market integration. After estimating the models, we show that financial depth has significant short-run and long-run effects in most of our sample countries in the linear mode. We also show that the long-run impact of financial depth on financial market integration is asymmetric in all eight countries, concluding that financial depth and risks associated with it play an important role in international financial market integration, and it is important for countries to select and implement adequate financial market policies to take advantage of this relationship.

Our paper has two main objectives. First, we aim to investigate the relationship between global economic contraction (GECON) and the return volatility of gold. Second, we examine the role of climate change as a mediator in this connection. To achieve this, we use the GARCH-MIDAS model, which accommodates data in different frequencies in the same model. This prevents the loss of important information when aggregating high-frequency data to lower-frequency data. We also use alternative measures of GECON from Kilian and Zhou (Journal of International Money and Finance, 2018; 88, 54–78) and Baumeister et al. (Review of Economics and Statistics, 2020;104(4), 828–844) to ensure the robustness of our findings. Our results show that global economic contraction positively impacts the return volatility of gold. Additionally, our findings confirm that the increased uncertainty caused by climate change makes gold a safe haven for investors. This means that gold's return volatility is not negatively impacted by the rising level of uncertainty caused by climate-induced contraction. Moreover, we note that the index of GECON that accommodates more dynamics can produce more accurate predictability for gold market volatility. Our analysis of stock market volatility further confirms that gold has a safe haven potential relative to the stock market.

This thesis develops an open economy structural vector autoregression model to determine how the Australian economy is affected by both a US housing demand shock and a US housing supply shock. Previous literature has either grouped Australia with other economies or has excluded Australia altogether. This leaves a significant literature gap in explaining how the Australian economy is solely impacted. The results of the model indicate both a US housing demand and a US housing supply shock significantly impact the Australian economy, with the most significant being the impact of a US house price shock upon Australian GDP which is large and persistent over time. The results contribute to the understanding of how Australian policymakers should incorporate the US housing market into policy decisions and central bank modelling.

This article investigates the unique financial conditions in Australia in the wake of COVID-19, a subject of critical importance given the recent unprecedented economic events such as the fastest rate rises since the 1990s and the presence of persistently high inflation. This study aims to contribute to the literature by examining the speed of interest rate changes and its implications on financial conditions, particularly in an environment characterised by negative real interest rates. The research aims to extend and refine the financial conditions index (FCI) developed by the Reserve Bank of Australia by incorporating a momentum variable to capture the speed of interest rate changes. A dynamic factor model is utilised to investigate 73 data series across nine main categories, constructing the FCI on a quarterly basis. The results indicate that rapid interest rate changes significantly impact financial conditions, holding significant weights within the model, thus requiring careful policy considerations.

This study examines factors influencing Australian nurses' decisions to quit their jobs, the pathways they take after quitting, and estimates the average wage change associated with a nurse changing professions. Using data from the Household, Income, and Labour Dynamics in Australia Survey and panel data estimation methods, we find that a nurse's pre-exit hourly wage is significantly associated with their exit decision when controlling for relevant exogenous factors. We also find that most nurses who change professions stay in the healthcare sector, which is characterised by significant increases in hourly wages and occupational prestige and suggests that these nurses change jobs for better opportunities. We conclude that while nurses' exit decisions are not associated with a loss of human capital in healthcare, higher wages would have to be paid if the policy objective is to increase nurse retention.

This paper examines the effect of the rise in Chinese import competition on the Australian labour market from 1991 to 2007. Using the data from the Australian Bureau of Statistics Labour Force Survey, I find three main results. First, the Chinese import competition generates net job gains for the economy at both aggregate and sectoral levels. The manufacturing and service sectors both experience a growth in employment due to the movements of workers between and within industries. Second, the job losses in manufacturing industries are accompanied by expansions in services industries. The Chinese import exposure reorganises the job allocations from manufacturing to services. Third, the industrial shifts and skill-biased technical change caused by the Chinese imports bring about job polarisation. Estimates show evidence of job concentration on low-skilled and high-skilled workers while also a weakening focus on middle-skilled occupations.

In this paper, I study optimal monetary policy in a simple New Keynesian model with loose commitment and stochastic credibility. The loose commitment framework breaks the commitment-discretion dichotomy in optimal monetary policy problems and allows for intermediate cases between commitment and discretion. Under this framework, the central bank is imperfectly credible, meaning that it occasionally reneges on promised policy plans. I contribute to the literature by introducing time-variation in the central bank's credibility. I model credibility as an exogenous two-state Markov chain and use a recursive saddlepoint functional equation to solve the model. I find that greater persistence and frequency of credibility losses increase welfare losses.