Patents, Innovation and Growth

New growth theories emphasize the role played by innovation in promoting economic growth. Since it is difficult to quantify the amount of innovation undertaken in an economy, there is little available empirical evidence assessing the contribution made by innovation to growth, in contrast to abundant evidence on the role of physical capital accumulation in the growth process. In this paper patent data are used to proxy the amount of innovation undertaken in an economy. The patent data are used to explore two questions. First, how important is innovation to economic growth in Australia, and second, are reductions in innovations sourced in Australia offset by increases in foreign sourced innovations in Australia?     

CO2 emissions in Australia: economic and non-economic drivers in the long-run

Australia has sustained a relatively high economic growth rate since the 1980s compared to other developed countries. Per capita CO₂ emissions tend to be highest amongst OECD countries, creating new challenges to cut back emissions towards international standards. This research explores the long-run dynamics of CO₂ emissions, economic and population growth along with the effects of globalization tested as contributing factors. We find economic growth is not emission-intensive in Australia, while energy consumption is emissions intensive. Second, in an environment of increasing population, our findings suggest Australia needs to be energy efficient at the household level, creating appropriate infrastructure for sustainable population growth. High population growth and open migration policy can be detrimental in reducing CO₂ emissions. Finally, we establish globalized environment has been conducive in combating emissions. In this respect, we establish the beneficial effect of economic globalization compared to social and political dimensions of globalization in curbing emissions.     

Economic models of fertility behaviour in Australia

The author analyses individual fertility patterns in Australia from the perspective of recent economic models of the family. The emphasis is on the relationship between fertility and economic variables such as human capital, market wages, and wealth. "Several dimensions of fertility are considered, including 'quality' of children, completed family size, and the decision whether to have children or not." Data are from the 1973 Social Mobility in Australia Survey.     

Implications for Australia of Cross-Country Comparisons in Economic Performance*

What can be learnt about the economic experience of Australia in the 1970s by comparing the performances of other countries with that of Australia? In particular, what do those comparisons suggest about the nature of and reasons for, the Australian outcomes for prices, production and employment? These are the main questions addressed in this paper. In Section II, comparisons are made for several indicators between the experiences of Australia and nine other countries. In Section III the outcomes are analyzed and in Section IV some implications for Australia are drawn.     

A Time-Series Perspective on Convergence: Australia,UK and USA since 1870*

Tests of the Convergence Hypothesis or the tendency for per capita income levels to narrow over time, have generally utilized cross-sectional data and have usually found conflicting evidence. In this study we utilize time-series data on Australia, UK and USA for the period 1870–1992, and time-series tests, to consider both ‘catching-up2 and ‘long-run convergence’. The paper finds evidence in favour of long-run convergence in per capita income levels for the UK and Australia for the period 1892–1992 and catching-up in the case of UK and USA, and Australia and USA, giving some support for the exogenous approaches to economic growth.     

The Game is Not the Same: The Demand for Test Match Cricket in Australia

We estimate a cricket demand equation for test matches played in Australia. Consistent with previous studies of the demand for professional sport, demand is specified as a function of both economic factors (such as admission price, income and market size) and match specific factors (such as the uncertainty of outcome, weather conditions and the presence of star players). Our results suggest that match specific factors, rather than economic factors, influence attendance. We compare our results to those of previous studies for Australia and England which estimate the demand for cricket.     

Agriculture as Van and Rear in Institutional Change

The formation of interest groups is path-dependent. The ideology and thus behavior of interest groups cannot be isolated from history, customs, economic conditions and changing alternatives open to individuals. In Australia, there were historical and traditional divisions concerning farmers producing for international markets that depend on flexible world prices and those producing for the domestic market with stabilized and subsidized prices. The National Farmers Federation (NFF) (1979) is the result of a historical-evolutionary-developmental process of preceding agricultural interest groups. Hence, an understanding of the NFF ideology that promotes free competition and the elimination of agricultural subsidies worldwide, in contrast to the agricultural interest groups in the United States and UK, requires an examination, using an institutional and economic complexity approach, of the evolution of agricultural interest groups in Australia.     

Low Wage Growth: Why It Matters and How to Fix It

Neoclassical economic theory and its supply‐side account of the drivers of economic growth has been influential amongst Australian economic policymakers and advisors. In the post‐Keynesian tradition, we argue instead that aggregate demand drives economic growth, even in the medium term. In particular, the investment and innovation that depends upon that investment are mainly determined by the investment response to consumer demand. Currently, weak wages growth in Australia is weakening that consumer demand. The paper examines the causes of weak wages growth and offers solutions.     

What impact do differences in financial structure have on the macro effects of bank capital requirements in the United States and Australia?

We investigate the influence of jurisdictional differences in financial structure on the economic consequences of bank capital regulation. We use two disaggregated financial computable general equilibrium models to compare the impacts of identical increases in bank capital adequacy ratios in the U.S. and Australia. In both models, this raises bank equity financing shares, and lowers banks’ risk-weighted asset holdings. Thereafter however, differences in financial structure drive contrasting outcomes: in the U.S., average costs of capital fall, stimulating real investment, while we find the opposite outcome for Australia. We attribute this to differences in the structure of bank assets (U.S. banks hold more risk-free assets) and the importance of banks as intermediaries (bank finance is more important to capital formation in Australia). This may explain why capital regulations encompass non-banks in the U.S. but not Australia.     

Unfinished Business

Abstract This article is about three phases in Australian trade policy: protectionism, unilateral liberalisation, and participation in regional trade liberalisation. Australia used to have one of the most protected economies in the world. The last dozen years have seen a radical transformation of Australian economic policy: Australia is in the process of becoming one of the most open economies in the world. The last five-to-ten years have also seen a related transformation of Australian foreign economic policy. This policy is now centrally concerned with promoting the process of international economic integration within the Asian region; particularly through the APEC process. Should Australia be pursuing ‘open regionalism’ in the Pacific? or promoting an Asia Pacific trading bloc? or concentrating on its own unilateral trade liberalisation? or using its energy to press for global liberalisation through the GATT? I argue that there remains a deep contradiction in the APEC process; that ‘open regionalism’ is in Australia's interests, and that the critical test of Australia's conversion to liberalisation will come in this third phase, in the future answers that it gives to these questions.     

Fiscal Decentralization and Public Sector Size in Australia*

This paper examines the impact of fiscal decentralization and intergovernmental collusion, and the resulting fiscal dependence, on the size of the public sector in Australia. Contrary to evidence for the United States, fiscal decentralization is found to have no impact on public sector size in Australia. Three possible explanations for this finding were suggested the relatively small number of lower-level governments; the economic insignificance of local governments; and the relative immobility of citizens. Fiscal dependence of State governments on the Commonwealth proves a significant determinant of public sector size, consistent with findings for the United States.     

Closer Economic Relations with East Asia?

This paper examines Australia's economic links with East Asia and the policy implications of these links. The main issue is whether Australia should join the regional trading arrangements with East Asian countries that have been proposed. It examines the factors which determine the share of East Asia in Australian exports. One of these, the country bias factor, is threatened by proposed regional trading arrangements which might exclude Australia. After considering the costs of exclusion, the paper concludes that Australia should consider developing new bilateral or regional trade arrangements with countries in East Asia.     

Obesity and happiness

This article provides insight on the relationship between individual obesity and happiness levels. Using the latest available panel data from Germany German Socio-Economic Panel (GSOEP), UK British Household Panel Survey (BHPS), and Australia Household, Income and Labour Dynamics in Australia (HILDA), we examine whether there is statistical evidence on the impact of overweight on subjective well-being. Instrumental Variable (IV) analysis is utilized under the presence of endogeneity, stemming from several explanatory variables. Results indicate that in all three countries obesity has a negative effect on the subjective well-being of individuals. The results also have important implications for the effect of other socio-demographic, economic and individual characteristics on well-being.     

The Pricing and Management of Walking Tracks in Tasmania

Walking tracks are an important component of the recreational use of Australian national parks. This paper applies economic theory to the issues associated with the management of walking tracks in Tasmania and, by implication, the rest of Australia. An economic model is developed to assess the implications of three policy regimes (pricing, quotas and unrestricted access) for the management of walking tracks. The model is calibrated to approximate (as best as practicable) the most popular of Tasmanian walking tracks, the Overland Track.     

Estimates of the Underground Economy in Australia

In an age of tighter government regulation, many individuals and businesses are distorting our notion of the size of the Australian economy by actively participating in the underground economy. The consequences are clear: policy makers have imperfect knowledge on the state of economic affairs. Although there exists considerable international literature on the size of the underground economy, academics and public officials alike appear to have paid little attention to the extent of illicit economic behaviour in Australia. The aim of this paper is to provide the first known time-series estimate of the size of the Australian underground economy and to illustrate that its existence has implications for the nature of the business cycle in Australia.     

Business Cycle Co‐movement between Australia and East Asia

This article analyses business cycle co‐movement between Australia and 10 major economies in the East‐Asian region by using two measures: concordance indices and correlation coefficients. The results from the concordance index suggest that Australia's business cycle is becoming increasingly synchronised with those in East Asia, particularly with China and Japan. The correlation coefficients of gross domestic product (GDP) growth and the deviation of real GDP from its trend between Australia and its East‐Asian neighbours are also significantly higher since 2000, relative to the correlation coefficients found for the 1990s. The growing importance of East Asia in Australia's economic future implies that the risks facing the economy have changed and Australia needs to engage in more macroeconomic policy dialogues with its neighbouring economies to improve their policy responses.     

Economic Policy Challenges for Sustained Growth*

This paper presents the views of the Prime Minister (as at March 1985) on some of the major economic challenges facing Australia and some of the policy soptions his government proposes to pursue in order to maintain the economic recovery without a resurgence of inflation and to improve Australia's long-term growth performance.     

E–Commerce and the Australian Economy

This paper considers the likely impact of e–commerce and the Internet on the Australian economy. It surveys literature on the extent and development of e–commerce in Australia and its impact on the shape of the Australian economy. Evidence for the 'renewal' of the Australian economy is presented and examined, especially the question of whether Australia has enjoyed increases in productivity as a result of the production and/or use of new information and communications technology. Australia is seen as broadly well placed to benefit from the Internet and e–commerce. Traditionally isolated from the world's main economic centres and reliant on commodities in international trade, the advent of the Internet is ideal for a country in transition to a service–orientated, knowledge–based economy. As the composition of Australia's exports becomes more service–orientated and knowledge–intensive, traditional trading links with Europe and North America may strengthen relative to those with Asia.     

Jevons In Australia: A Reassessment*

Historians of economic thought have generally considered that W. S. Jevons' Australian work on political economy has little significance. This article presents three arguments for reassessing that account. First, while in Australia, Jevons formulated the basic premises of his Theory of Political Economy. Second, the key influence on him during this period was not D. Lardner, as previously thought, but Professor Maurice Pell of Sydney University. Third, in Australia, Jevons formulated the project which culminated in the publication of his Theory—the derivation of ‘laws’ of income distribution, showing economic agents were rewarded according to their contribution to production.     

IMMIGRANT EARNINGS: A LONGITUDINAL ANALYSIS

This paper uses the Longitudinal Survey of Immigrants to Australia to analyze the determinants of the level and growth in earnings of adult male immigrants in their first 3.5 years in Australia. The theoretical framework is based on the immigrant adjustment model, which incorporates both the transferability of immigrant skills and selectively in migration. The cross-sectional and longitudinal analyses generate similar findings. The level and relative growth of earnings are higher for immigrants with higher levels of skill and who are economic/skills tested migrants, as distinct from family based and refugee migrants. The analysis indicates that immigrant economic assimilation does occur and that in these data the cross-section provides a good estimate of the longitudinal progress of immigrants. The findings are robust across statistical techniques.