Australian Economic Papers最新文献

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.

This paper represents a significant extension of the traditional Cournot extraction game, by introducing the linear supply function strategy space in a novel, dynamic way. A variety of asymmetric cases are considered, including the new firm-specific competitive strategies. The results highlight the importance of competition in accelerating the supply of critical minerals, which is vital to mitigate climate change, but also present a new sustainability challenge.

The longstanding issue of declining fertility in developed nations motivates a revaluation of the effectiveness of fertility-targeted policies. This thesis focuses on the 2004 Australian Baby Bonus, a past pronatalist incentive offering a lump sum financial transfer for every child born after 1 July 2004. We employ the synthetic control method to construct a counterfactual scenario for Australia in the absence of the policy's introduction. Using aggregate country-level data from the World Bank World Indicator's Database from 1998 to 2012, we carefully select suitable Organisation for Economic Co-operation and Development countries as control units and economic indicators to include as covariates. Our primary specification reveals a 6.82% increase in total fertility between 2005 and 2012, induced by the ABB. Robustness tests, including various model specifications, consistently confirm a positive fertility effect. This comparative case study provides a comprehensive analysis of the ABB's impact, emphasising the significance of methodological choices in assessing fertility-related policies.

I exploit data from the Longitudinal Study of Australian Children and linked administrative data to study the effect of various parenting styles on a child's academic achievement and development of non-cognitive skills at age 14. My results suggest the authoritative parenting style, characterised as disciplined but warm parenting, to be optimal for test scores, prosocial behaviour, and ability to focus. For test scores, I find a greater effect if this parenting style was applied 4 years prior rather than more recently. Conversely for non-cognitive skills, I find a greater effect from contemporaneous parenting. The implication of my results is to encourage authoritative parenting from an early age but also highlight its continued importance in the present.

This paper leverages a rich dataset of 1.24 billion traffic flow observations across 36,666 vehicle detectors to estimate the price elasticity of traffic flow with respect to fuel prices in Melbourne, Australia. I find that a 1% increase in fuel prices leads to a 0.0556% decrease in traffic flow across Melbourne, where traffic flow is defined as the number of vehicles passing a vehicle counter per hour. I find significant regional heterogeneity across Melbourne, with evidence of positive own-price elasticities in regions in the centre of the city, and in peak commute times on both weekdays and weekends, which I argue is evidence of a congestion-speed effect. Moreover, regions near the CBD with high incomes tend to be less elastic than regions further away with reduced access to public transport. These findings can be used to determine the optimal tax or charge to internalise the externalities produced by motor vehicles.

Introduction of stay-at-home orders during the COVID 19 pandemic led to immediate disruption of individuals' daily routines with confinement to their households and changes in risk factors of domestic violence. Utilising data from the Bureau of Crime Statistics and Research (BOCSAR), I estimate the causal impact of stay-at-home orders on domestic violence assaults in New South Wales. Since adoption dates for these restrictions varied across LGAs, I implement a staggered difference-in-difference (DiD) specification. I find a 21% decline in daily domestic violence assault incidents during stay-at-home order periods compared to pre-restriction incidence levels. These results are robust under weekly frequency and extrapolated fixed effects models. I further utilise google search term data as a proxy of consistent reporting rates and unemployment data to identify household power dynamics. Analysis of both data sets support estimates of declines in domestic violence during stay-at-home order periods.

This thesis examines how monetary policy shocks affect wealth inequality in Australia. I analyse how a monetary policy shock, through asset price responses, affects household balance sheets and wealth inequality measures. I find that contractionary monetary policy reduces the wealth gap, but also disproportionately increases the wealth share of the most affluent Australians. This is driven largely by the response of house prices to an increase in the central bank's policy rate. I use a novel methodology to overcome the data limitations that usually impede studies of wealth inequality, and I produce results with implications for central bankers and policymakers. My results are robust to numerous lag specifications, modelling techniques and identification strategies.

This thesis explores whether monetary policy reacts to house price movements, by employing a New Keynesian model with a housing factor and estimated using Bayesian estimation techniques. The primary emphasis of this study is on the United States, with supplementary analyses on central banks in several advanced economies. The principal finding of this thesis reveals that the Federal Reserve responded substantially but episodically to house prices. Furthermore, my investigation indicates that the Reserve Bank of Australia, the Reserve Bank of New Zealand, Bank of England, and the European Central Bank did not incorporate house prices into their policy framework, whereas the Bank of Canada did so episodically. The baseline results remain robust across a range of sensitivity checks.

This paper explores the effects of union involvement in enterprise bargaining agreements (EBAs) on non-wage outcomes. My research is carried out through using a dataset of all federal EBAs in Australia from 1997 to 2021 and utilises fixed effects regressions. An index was constructed of 10 variables to capture a comprehensive overview of non-wage outcomes. This paper finds that union involvement in an EBA, on average, is associated with a 0.494 unit increase in the index, or a 13.5% increase on the average index score. Overall, these results provide further insight into union impacts on the labour market within the enterprise bargaining framework.

When Rachel ViforJ first approached me about the RBA being involved in a special issue of Australian Economic Papers featuring the best economic honours theses of the past couple of years, I jumped at the opportunity. The honours programs at Australian universities provide a world-class education in economics to some of our smartest students. A key part of that training is writing a thesis and applying everything they have learnt over the past 3 years to an important economic question. The skills honours students gain through this process is one of the reasons the RBA recruits so many economics honours students. As a result of their experience in honours programs they can very quickly make a contribution to the important public policy issues that we grapple with at the RBA. Consequently, if I missed the opportunity to highlight the quality of economic analysis being done by some of our brightest students, it would be (to borrow an analogy from the great Paul Kelly) like melting wax to fix my wings, losing my shirt or pawning my ring.

This initiative has caused me to reflect on my own experiences as an economics student. When I was doing honours back in the early '90s it was a time of remarkable change in the Australian economy. Significant reforms were sweeping through the economy and we were just emerging from the recession ‘we had to have’. There were major reforms to labour markets, retirement savings, financial markets, foreign trade and the beginnings of a wave of privatisation of government businesses—the economy was opening up and moving into deeper water. My own honours thesis analysed the newly introduced enterprise bargaining system, but there was no shortage of interesting topics to choose from. It was, in short, an exciting time to be an economist.

The benefits of those, and subsequent, reforms were seen over the following decades. There was unprecedented productivity growth through the 1990s and the start of the Great Moderation. While there has been much debate about the causes of the Great Moderation, my own view is that it reflects improvements in economic policymaking—particularly monetary policy. This might have been seen as a triumph for economics, but there was a sting in the tail. Economics came to be seen as boring. All the big reforms had already been done, the economy was travelling nicely and all that was left was some tinkering around the edges. One reflection of this can be seen in the number of students studying economics. As the Public Access and Education team at the RBA, led by Jacqui Dwyer, has documented—enrolments in high school economics courses in Australia have fallen by around 70% since the early 1990s.

Which brings us to today. From my perspective, the early 2020s feels a lot like the early 1990s. We are emerging from one of the biggest disruptions to our lives since the recession of 1991 and the economy is being reshaped by massive structural changes. Geopolitical tension and the experi