The goal is to determine if there is a stable Broad Money demand relationship for Australia. Previous studies have not reached a consensus on this important issue, partly because the time series techniques used do not accommodate structural breaks. A standard multivariate cointegration analysis is conducted on monthly data over the period 1976(3) to 1998(4). It reveals some evidence for the presence of cointegration since one cointegrating vector is found. This involves broad money, the spread between interest on broad money and on non-money assets and real GDP. The evidence of cointegration is again present when a structural break is found in the relationship using Gregory and Hansen (GH) methodology. This occurs in 1991 coinciding with a deep recession and policy induced, interest rate reductions. The income elasticity of demand exceeds one, reacts positively to the interest spread and negatively to in¯ation. I. I n t ro d u c t i o nThe task here is to test for the existence of a long run Australian Broad Money (MB) demand relationship in the presence of potential structural breaks. Previous studies of Australia's demand for MB have not allowed for the possibility of regime shifts. The last important analysis of this issue by de Brouwer et al. (1993) was conducted prior to advances in time series analysis which allowed for structural breaks in cointegrating relationships. This study is designed to extend our knowledge of the behaviour of MB demand to allow for regime shifts. The signi®cant motivations for a further analysis of Broad Money (MB) are ®rst, the importance of a predictable, long run relationship between monetary aggregates such as broad money and other jointly determined economic variables in a general macroeconomic equilibrium and second, the signi®cance of the linkage between the selected monetary aggregate and monetary policy.In regards to the ®rst motivation, once it is agreed that long run money demand relationships are endogenous being determined in an overall structure along with output, in¯ation, interest rates and other variables, then the stability and predictability of money demand in¯uences the stability of any general macro equilibrium. So the quest for a well determined,
As in other western industrialised countries the structural ageing of the Australian population has significant labour market implications. Government has responded with a range of policies to persuade older workers to abandon early retirement and/or remain in the workforce past traditional retirement ages. But whether this generation of workers will be prepared to change their retirement plans in response to policy encouragement, and whether current policy measures will translate into significant numbers of older workers extending their labour force participation is uncertain. Using the Australian Survey of Retirement Attitudes and Motivations (ASRAM) a recently completed, nationally representative survey of Australian workers aged 40 – 59 years we find that while the Government message about working longer is getting through, older workers are relatively unresponsive to current policy measures. Other policies, especially policies outside the financial realm, are needed to maximise the number of older Australians in the labour force.
Among the more profound features of population ageing is its regionality. This regionality is particularly marked in Australia, where the timing and speed of ageing are occurring at substantially different rates by state and territory. The shift to natural decline is expected to create many social, economic and political predicaments where it is first experienced. In Australia, Tasmania will be the first to enter natural decline, followed soon thereafter by South Australia, but not for several years by the youngest states and territories. These diverging demographic forces will have many implications for the complex mixture of federal, state and local government that currently adjudicates over policymaking and implementation, especially concerning the collection of taxes, the distribution of the goods and services of the Welfare State, and a large element of fiscal redistribution. This paper provides an overview of demographic characteristics and dynamics by region, and examines their projected effects on three socio-economic indicators: educational demand, the labour market, and demand for Age Pensions. The changing demography will have both beneficial and adverse affects, and unless the profound regionality is soon understood and engaged with, currently older and younger states are likely to encounter not only diverging demographic forces, but also diverging fortunes.Population ageing is occurring unevenly across and within the various countries and regions of the world. A related transition to low or zero natural growth or natural decline, projected to occur in all developed countries by mid-century, is expected to cause unprecedented social, economic, and political predicaments in those countries and regions where it is first experienced. According to the United Nations Population Division (2000: 4), the emerging situation requires objective and comprehensive reassessments of many long-established economic, social and political policies and programs. This will certainly be the case in Australia, where a complex mixture of federal, state, and local governments and non-governmental agencies have responsibility for the collection of taxes, the funding and redistribution of the goods and services of the Welfare State, and of the State in general; and where the impact of ageing and the onset of natural decline in each state and territory will differ across a substantial time span.
This analysis of bilateral trade involves four Asia‐Pacific nations (USA, Japan, Singapore and Australia) on a quarterly data set 1977 to 1994. The reduced‐form model applied here derives from a structure which accommodates income, real exchange rate and real‐balance effects. We find that bilateral balances between these countries are not cointegrated with some potential determinants, in particular real exchange rates. In the short run, appropriately defined, we find that Singapore’s trade with the USA and Japan is influenced by real exchange rates; Australian‐Japanese and Australian‐US trade is influenced by real income and real‐cash‐balance effects but not real exchange rates while USA‐Japanese bilateral trade is influenced only by real‐cash‐balance effects. The general conclusion is that real exchange rates have only limited effects on these selected Asia‐Pacific bilateral trading patterns, while real‐balance and income effects have a greater impact over the short run.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.