We add a housing sector to the Reserve Bank of Australia's small open‐economy model to explore the effect of commodity price shocks on housing investment. The model predicts that housing investment booms may follow commodity booms. Commodity booms have a persistent effect on housing services price inflation and they ‘crowd out’ housing investment. When the commodity boom ends, the combination of higher

Using firm‐level data, we examine the efficiency of labour reallocation in Australia over the period 2002–16. We find that more productive firms account for a higher share of employment – particularly in trade‐exposed sectors – and Australia appears more successful at reallocating resources to high‐productivity firms than many OECD countries. But the propensity for high‐productivity firms to expand

Do ethnic enclaves assist or hinder immigrants’ economic performance? The empirical literature on this question is inconclusive. In this paper we extend the literature by constructing a dynamic variable from micro‐panel data to capture the effects of spatial networks of immigrants’ ethnic‐specific resources. We account for endogeneity of the network and other variables. Using the HILDA data set, and

We study trends in progressivity of the Australian personal income tax system after the introduction of A New Tax System (Goods and Services Tax) Act 1999. We employ two methodological approaches: one based on tax liability progression and one based on tax liability distribution. The latter shows a cycle of lesser and greater tax progressivity in Australia between 2000 and 2018. We identify two main

Non‐pecuniary rewards to work, or psychic income, are a pervasive phenomenon in several labour markets, yet they have been little investigated either theoretically or empirically. Creative industries are a particular case where non‐monetary incentives are widely observed. These are also industries where moonlighting commonly occurs because artistic or creative activity is generally low paid, such that

We examine the consumer price inflation experiences of Australian households across the income distribution using Australian Bureau of Statistics data and prices and methodology from the national consumer price index. Across the period 2011–18, we find that the lowest‐income households have experienced the largest inflation and those at the top have experienced the least inflation. These differences

In this paper we establish empirical evidence for the relationship between the systematic jump betas of financial institutions and two types of systemic risk index: a capital shortfall index and a interconnectedness index. Using high‐frequency data for US financial sector stocks, we show that equity market jumps are positively related to capital shortfall and negatively related to interconnectedness

Existing evidence has demonstrated that sanctions affect unemployment payment recipients’ behaviour. However, in addition to financial impacts, sanction application includes administrative processes. This study examines a feature of Australian unemployment benefits, whereby jobseekers not meeting requirements may face a zero‐dollar sanction (termed suspension). The results indicate a strong behavioural

Paid parental leave is an important part of family policy in OECD countries. Australia's Paid Parental Leave scheme was introduced in 2011 and provides 18 weeks of leave paid at the full‐time minimum wage for the primary carer of a child. We estimate the effect of access to paid parental leave on women's fertility intentions by exploiting the differential impact of the scheme for women working in the

We examine the risk transmission mechanisms in the interconnected Australian National Electricity Market (NEM). We illustrate that the transmission of extreme events should be considered in terms of their magnitude (via skewness) and the likelihood of their occurrence (via kurtosis) when promoting NEM interconnectedness. Our empirical findings suggest that interconnectedness costs can be limited by

This paper develops a methodology for detecting and measuring contagion using high‐frequency data which disentangles continuous and discontinuous price movements. We demonstrate its finite‐sample properties using Monte Carlo simulation, focusing on the empirically plausible parameter space. Decisions to extend the role of financial regulation around the world to the supervision of insurers in the wake

This study assesses the impact on competitiveness of banking takeovers in Australia, to inform regulators and contribute to the mergers and acquisitions body of international evidence. New industrial organisation theories and empirical evidence suggest that more concentration may or may not lead to decreased competition. We assess competitiveness with the Bresnahan–Lau conduct coefficient. We find

This paper investigates the presence of housing bubbles in Australia at the national, capital city and local government area (LGA) levels. We control for housing market demand and supply fundamentals using the technique of Shi (2017), and employ the recursive evolving method proposed by Phillips et al. (2015a,b) for the detection of explosive bubbles. While the national‐level analysis suggests a short‐lived

We review the literature on financial constraints and the performance of small and medium enterprises (SMEs). We consider the important role that SMEs play in the economies of Australia and the OECD. We examine the role of financial constraints in SME growth, with emphasis on business cycles and credit access. We discuss issues that SMEs face in accessing financial resources for expansion. We look

This paper examines the efficacy of the Australian points system in a family context among working‐age permanent resident immigrants who arrived between 2000 and 2011 when there was a major focus on skills selection. Sixty‐seven per cent of these immigrants were granted a skilled visa while 25 per cent hold a spousal visa (spouses of Australian citizens). More than half of the skilled visa recipients

Using a route choice experiment with embedded travel time variability, this study empirically estimates car commuters’ risk attitudes and taste preferences within a nonlinear mixed logit model. In addition to the identified overall risk‐taking behaviour, we find that risk attitudes covary with some sociodemographic characteristics, that is, older commuters are more risk‐taking than young ones and higher‐income

This book provides an excellent summary of labour market facts over the past couple of years as well as great insight into Blanchflower's thinking during his time as external UK Monetary Policy Committee (MPC) member. While this was the biggest shock to labour markets in recent history, of course the lack of wage growth and declining job opportunities for non-university-educated workers are phenomena

To help the new parent navigate the overwhelming amount of often conflicting advice on sleep techniques, Oster undertakes a literature review of the various techniques. An important topic that Oster takes some time to delve into is sudden infant death syndrome (SIDS). (p. 115) From that starting point, Oster carefully walks the reader through the evolution of evidence that underpins current recommendations

Since he won the Nobel Prize and joined the World Bank as Chief Economist, most of us see Stiglitz as a policy-oriented economist clearly aligned with the political left. To those with preconceived ideas about Stiglitz's world-view, it may come as a surprise that Stiglitz argues strongly in favour of competition - very much in line with what we teach in first-year economics classes. I feel that in

Market research enables firms to identify customer needs and preferences using data. Traditionally the focus of textbooks about market research is on the detailing of the market research process and the foundations of analysis methods. Sufficient background information about the market research process, basic empirical methods, and their application using Stata add up to a good choice for entering

This book is full of typos, grammatical errors, and strange turns of phrase which make it difficult to take in the content. On the other hand, a substantial chunk of the book is dedicated to explaining "virtue ethics", a theory which has, judging by number of citations, attracted little interest from the profession. Even overlooking the poor editing, I could not recommend this book as an undergraduate

The problem that this author addresses is that attorneys at law earn their keep. The private attorney "codes" these objects such as stocks, bonds, and ideas into capital that not only protects wealth but automatically creates more wealth. [Extracted from the article]

This paper describes an approach to making fiscal policy decisions based on probabilistic statements on the likely occurrence of events as specified in a rules‐based framework for making fiscal adjustments. The event probability forecasts are obtained from a simple time series econometric model of the key variables influencing debt dynamics (interest rates, output and debt itself). The approach is

We develop and analyse comprehensive, multi‐item scales of the quality of Australian jobs, using the rich measures of job characteristics from the Household, Income and Labour Dynamics in Australia Survey. Through exploratory methods and multidimensional item response theory modelling, we uncover four gender‐specific scales that describe the autonomy, demands/engagement, compensation adequacy and security

This paper explores the degree of risk aversion amonsg Australian households using panel data from the Household Income and Labour Dynamics in Australia (HILDA) Survey. Using households' share of risky assets, we test whether relative risk aversion is constant in wealth. After accounting for measurement error, we cannot reject the constant relative risk aversion (CRRA) assumption. Using a CRRA utility

We build an empirical model of the Australian housing market that quantifies interrelationships between construction, vacancies, rents and prices. We find that low interest rates (partly reflecting lower world long‐term rates) explain much of the rapid growth in housing prices and construction over the past few years. Another demand factor, high immigration, also helps explain the tight housing market

Based on a dynamic factor model for a data set with more than 100 variables, we find that macroeconomic fluctuations in Australia can be largely captured by just two common factors. However, the factor structure changed soon after the introduction of inflation targeting in the 1990s, resulting in a large reduction in cross‐sectional variation related to these common factors. Estimates from a block‐exogenous

Constructing a new series of incarceration rates from 1860 to 2018, I find that Australia now incarcerates a greater share of the adult population than at any point since the late nineteenth century. Much of this increase has occurred since the mid‐1980s. Since 1985, the Australian incarceration rate has risen by 130 per cent, and now stands at 0.22 per cent of adults (221 prisoners per 100,000 adults)

This paper discusses the decisions made in designing a new Australian macroeconometric model to be used for both policy analysis and forecasting. Serving these dual functions requires a reasonable level of consistency with both macroeconomic theory (emphasised in New Keynesian dynamic stochastic general equilibrium models) and macroeconomic data (emphasised in vector autoregression models). The key

Studies of auction prices for artworks typically relate the conditional moments of a single realised price distribution either to characteristics of the artist, the artwork and the auction or to pre‐sale information. Using data from the Australian Art Sales Digest for the 100 best‐selling Australian Indigenous artists over the period 1987–2014, we use finite‐mixture models to understand heterogeneity

This paper compares the predictive performance of several models of risk aversion and time preferences in experimental settings. Models are evaluated on the basis of out‐of‐sample prediction rather than in‐sample fit. For preferences over risk, with the exception of very small sample sizes, allowing the estimation procedure to select between constant relative risk aversion and constant absolute risk

This paper introduces MARTIN, the Reserve Bank of Australia's new model of the Australian economy. MARTIN is an economy‐wide model used for forecasting and counterfactual scenario analysis. In contrast to other models used at the Bank (and at many other central banks) which adhere to a narrow theoretical view of how the economy operates, MARTIN is a macroeconometric model that consists of a system