Volume 34, Issue 2, 2004
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- Does the Term Structure Predict Australia's Future Output Growth? (A. Valadkhani)
- Business Expectations and Preferences Regarding the Introduction of Daylight Saving in Queensland (A. Worthington)
- An Analysis of the Sri Lankan Conflict Using an Economic Tool (P. Johannessen, J.S. Bandara, C. Smith)
- Could Foreign-Aid Financing Cause Excess Depreciation of Public Capital? Two Simple Hypothetical Cases (Y. Bu)
- Superannuation: A Guide to the Field for Australian Economists (G. Kingston)
Does the Term Structure Predict Australia's Future Output Growth?
The predictive power of the term structure of interest rates and four leading indicators for real output growth is examined using quarterly time series. Results are consistent with studies for France, Germany, the UK and Australia. The significance of the interest rate spread is robust to the inclusion of four other predictors. The annualised interest rate spread between 10-year Treasury bonds and 90-day bank bills explains 26 per cent of Australia’s future output growth. It is found that the interest rate spread of Australia’s major trading partners and an ABS composite leading indicator provide significant predictive power when the forecasting horizon is greater than 6 quarters. The results indicate that quarterly growth rates of M1and the S&P/ASX200 share price index are useful predictors of Australia’s GDP growth when forecasting horizons are less than 10 (or12) quarters.
Business Expectations and Preferences Regarding the Introduction of Daylight Saving in Queensland
This paper examines business support for the introduction of state-wide and zonal daylight saving time in Queensland on the basis of a survey of 708 businesspersons in 2002. Binary logit models are specified with the dependent variable defined as support for the introduction of daylight saving and the independent variables comprising industry and region identifiers, assessment of current and future business conditions, expectations of the impact of daylight saving on profits, sales, administration costs and staffing, and the number of employees. The results suggest that support for the introduction of daylight saving is a function of positive expectations regarding staffing, sales and administration costs and is associated with the utility and communications, finance and insurance, and cultural and recreational service industries. There also appears to be strong rural and regional resistance to the introduction of daylight saving, even among the business community.
An Analysis of the Sri Lankan Conflict Using an Economic Tool
P. Johannessen, J.S. Bandara, C. Smith
The Sri Lankan ethnic conflict has imposed substantial costs on the Sri Lankan people. All ethnic groups are either directly or indirectly affected by the conflict. Two main parties of the conflict, the Sri Lankan government and the Liberation Tigers of Tamil Eelam (LITE), signed a ceasefire agreement (CFA) in 2002 and began peace talks for a negotiated settlement. Despite recent peace talk setbacks and reports on massive CFA violations, both parties repeatedly state their commitment to a peaceful solution. This paper offers a strategic analysis of the Sri Lankan conflict by applying an economic tool, in order to determine the type of political structure most likely to work as a resolution, given the present environment, the power of the parties and their current objectives. An attempt is made to obtain probability statements for a set of political solutions, and to provide an interpretation of their numerical values.
Could Foreign-Aid Financing Cause Excess Depreciation of Public Capital? Two Simple Hypothetical Cases
This paper examines the possibility that foreign aid financing for public capital accumulation in developing countries may lead to excess depreciation of capital. The depreciation rate on public capital is endogenised in a general equilibrium framework in which the government collects a consumption tax to finance maintenance and repair expenditures as well as public investment. Tow simple cases are formulated and analysed to show that excess depreciation of public capital may result from budgetary and international aid and financing distortions that skew allocations to new investment rather than to maintenance of existing capital.