Economics - Research Publications
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ItemWelfare‐Reducing Mergers in Differentiated Oligopolies with Free Entry(Wiley, 2010)https://doi.org/10.1111/j.1475-4932.2009.00612.x
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ItemPhillips Curve and the Equilibrium Unemployment Rate*(Wiley, 2009-12)A time‐varying Phillips Curve was estimated as a means to examine the changing nature of the relationship between wage inflation and the unemployment rate in Australia. The implied time‐varying equilibrium unemployment rate was generated and the analysis showed the important role played by variations in the slope of the Phillips Curve in changing the equilibrium unemployment rate. The deviations of actual unemployment rates from the estimated equilibrium unemployment rates also performed remarkably well as measures of inflationary pressure.
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ItemThe role of portfolio shocks in a structural vector autoregressive model of the Australian economy(BLACKWELL PUBLISHING, 2008-03-01)Domestic and foreign equity shocks on the Australian economy are analysed within a five‐variate structural vector autoregressive model, with identification achieved through long‐run restrictions based on the natural rate hypothesis, monetary neutrality, long‐run portfolio balance and purchasing power parity. The results show that real equity values were undervalued by 19 per cent by June 2005, with the gap narrowing thereafter. Foreign crises are important factors explaining this deterioration. The real wealth effects of equity market shocks impact significantly upon financial and goods market prices, whereas output tends to be immune. The model is also able to address puzzles that exist in the vector autoregression literature.
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ItemOvercoming measurement error problems in the use of survey data on expectations(BLACKWELL PUBLISHING, 2007-09-01)Survey data frequently requires conversion from qualitative responses to quantitative series and it is often asserted that the conversion procedures introduce measurement errors that render the series unusable in structural modelling. We investigate the nature and treatment of the measurement error that arises when conversion procedures are used to obtain direct measures of expectations. We use simulation experiments to demonstrate the need for the adequate treatment of conversion errors and show that a procedure proposed to ‘purge’ the series of conversion error is extremely successful in circumventing the problems. We illustrate the procedures in empirical applications using business survey data.
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ItemSTOCHASTIC APPROACH TO INDEX NUMBERS FOR MULTILATERAL PRICE COMPARISONS AND THEIR STANDARD ERRORS(WILEY, 2010-06-01)The main objective of the paper is to demonstrate that a number of widely used multilateral index numbers for international comparisons of purchasing power parities (PPPs) and real incomes can be derived using the stochastic approach. The paper shows that price index numbers from commonly used methods like the Iklé, the Rao‐weighted, and an additive multilateral system are all estimators of the parameters of the country–product–dummy (CPD) model. The advantage of the stochastic approach is that we can derive standard errors for the estimates of the purchasing power parities (PPPs). The PPPs and the parameters of the stochastic model are estimated using a weighted maximum likelihood procedure under different stochastic specifications for the disturbance term. Estimates of PPPs and their standard errors for OECD countries using the proposed methods are presented. The paper also outlines a method of moments approach to the estimation of PPPs under the stochastic approach. The paper shows how the Geary–Khamis system of multilateral index numbers is a method of moments estimator of the parameters of the CPD model. The paper therefore provides a coherent stochastic framework for the Geary–Khamis system and derives standard errors of the Geary–Khamis PPPs.
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ItemInefficient policies and incumbency advantage(Elsevier, 2010)We present a model of (re)elections in which an incumbency advantage arises because the incumbent can manipulate issue salience by choosing inefficient policies in the policy dimension in which he is the stronger candidate. The voters are uncertain about the state of the world and the incumbent's choice of policy. Under complete information they would reelect the incumbent if and only if the state is sufficiently high. Undesirable policy outcomes may be due to either a bad state or the incumbent's choice of inefficient policies. The incumbent uses inefficient policies in intermediate states, whereby he creates uncertainty about the true state in such a way that voters are better off in expectation reelecting him. Hence the equilibrium exhibits an incumbency advantage that stems from asymmetric information and the use of inefficient policies.
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ItemPropensities to engage in and punish corrupt behavior: Experimental evidence from Australia, India, Indonesia and Singapore(ELSEVIER SCIENCE SA, 2009-08-01)
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ItemSign and phase asymmetry: News, economic activity and the stock market(ELSEVIER SCIENCE BV, 2010-12-01)
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