Introducing ‘Young Minds Matter’

Young Minds Matter: The second Australian Child and Adolescent Survey of Mental Health and Wellbeing provides updated national prevalence estimates of mental disorders in children and adolescents and measures the burden and impact of these disorders and the use of services and unmet need for services in the health and education sectors. The field work for Young Minds Matter included face‐to‐face interviews with the primary carer of 6,310 children and adolescents aged 4–17 years who were randomly selected from across Australia. This article describes the survey, the response rates achieved and the representativeness of the sample.     

The knowledge production of ‘R’ and ‘D’

Many studies investigate the relationship between R&D and patents applying knowledge production functions. Using aggregated R&D may underestimate the productivity of ‘R’, as mainly ‘R’ but not ‘D’ leads to patents. Disaggregating ‘R’ and ‘D’ shows a significant premium of ‘R’ towards patenting.     

‘Time-series’ versus ‘econometric’ forecasts : A non-linear regression counterexample

A non-linear regression model is presented in which a deterministic, model-based forecast of the dependent variable may have greater mean square error than a purely extrapolative forecast, in contrast to the result on relative forecast efficiency in linear models.     

‘Us’ and ‘Them’: the origin of identity,and its economic implications

Abstract We investigate the origins of identity and the innate proclivity to draw a distinction between ‘insiders’ and ‘outsiders’. We propose an evolutionary explanation: we argue that identity arises because it facilitates survival. In an evolutionary setting we endogenize preferences and demonstrate that the evolutionarily stable preferences fashioned by natural selection would distinguish between insiders and outsiders. We then work out the implications of such preferences in two contemporary scenarios, one entailing rent‐seeking behaviour and the other involving public good provision. Our results are in conformity with empirical evidence.     

Major transitions in ‘big’ history

‘Big’ history treats events between the Big Bang and contemporary technological life on Earth as a single narrative, suggesting that cosmological, biological and social processes can be treated similarly. An obvious trend in big history is the development of increasingly complex systems. This implies that the degree to which historical systems have deviated from thermodynamic equilibrium has increased over time. Recent theory suggests that step-wise changes in the work accomplished by a system can be explained using steady-state non-equilibrium thermodynamics. This paper argues that significant macro-historical events can therefore be characterized as transitions to steady states exhibiting persistently higher levels of thermodynamic disequilibrium which result in observably novel kinds or levels of organisation. Further, non-equilibrium thermodynamics suggests that such transitions should have particular temporal structures, beginning with sustainable energy innovations which result in novelties in organisation and in control mechanisms for maintaining the new organisation against energy fluctuations. We show how events in big history which qualify as historically significant by these criteria exhibit this internal structure. Big history thus obeys law-like processes, resulting in a common pattern of major transitions between steady-state historical regimes. This common process from cosmological to contemporary times makes big history a viable and relevant field of scientific study.     

‘BRAIN DRAIN’ OR ‘BRAIN CIRCULATION’: EVIDENCE FROM OECD'S INTERNATIONAL MIGRATION AND R&D SPILLOVERS

This paper empirically investigates whether labour mobility can transfer technology across borders based on the panel cointegration method. Estimates of specifications on a cross‐section of 19 OECD countries during 1980–1990 lend strong support to this thesis. Data indicate that international labour movement may help transfer technology across borders in both directions: from donor countries to host countries and vice versa. This suggests that migration may more likely create a ‘brain circulation’ rather than a ‘brain drain’. In addition, human capital has a significant impact on the research and development (R&D) diffusion process as it enhances a country's capacity to learn from a foreign technology base.     

An ‘oil’igopoly theory of exploration

This paper develops a theory of ‘oil’igopoly exploration of an exhaustible resource. Strategic exploration and production are jointly derived in a three period subgame perfect equilibrium. While the ‘oil’igopoly theory of exploration shares many features with non-strategic models of exploration and production, there is one important difference. The ‘oil’igopoly theory of exploration predicts that firms who exhaust their proved reserves before they can convert their unproved reserves into proved reserves have an incentive to over-explore, relative to the Nash equilibrium level of exploration. A simple empirical prediction is that firms holding smaller proved reserves should be observed doing more exploration. This prediction is consistent with country-level production and reserve data in the post-World War II era.     

A rigorous periodization of ‘big’ history

‘Big’ history is the time between the Big Bang and contemporary technological life on Earth. The stretch of big history can be considered as a series of developments in systems that manage ever-greater levels of energy flow, or thermodynamic disequilibrium. Recent theory suggests that step-wise changes in the work accomplished by a system can be explained using steady-state non-equilibrium thermodynamics. Major transitions in big history can therefore be rigorously defined as transitions between non-equilibrium thermodynamic steady-states (or NESSTs). The time between NESSTs represents a historical period, while larger categories of time can be identified by empirically discovering breaks in the rate of change in processes underlying macrohistorical trends among qualities of NESSTs. Two levels of periodization can be identified through this procedure. First, there are two major eons: cosmological and terrestrial, which exhibit qualitatively different kinds of historical scaling laws with respect to NESST duration and the gaps between NESSTs: the first eon decelerating, the second accelerating. Accelerating rates of historical change are achieved during the Terrestrial Eon by the invention of information inheritance processes. Second, eras can also be defined within Earth history by differences in the scaling of energy flow improvement per NESST. This is because each era is based on a different kind of energy source: the material era depends on nuclear fusion, the biological era on metabolism, the cultural era on tools, and the technological era on machines. Periodizing big history allows historians to uncover the mechanisms which trigger the innovations and novel organisations that spur thermodynamic transitions, as well as the mechanisms which keep historical processes under control.     

Worldwide Tax Reform ‘How Does Australia Compare?’

Drawing principally on the English-speaking countries, where tax reform has proceeded furthest, the common characteristics and causes of the worldwide tax reform movement of the 1980s are examined. Tax reform reflected the change in economic philosophy — disillusionment with state intervention and a revival of belief in the efficacy of markets.
The causes and content of tax reform in Australia have much in common with those elsewhere except that the reduction in marginal rates of income tax was achieved with no real change in the tax mix. The success of tax reform is assessed using as criteria: (i) how far the outcome matched the objectives specified by the reformers themselves — in particular tax neutrality; (ii) the sustain-ability of the reforms; and (iii) how far 'undesirable' consequences (especially distributional effects) were avoided. Applying these criteria to Ireland, Canada, the United Kingdom, the United States, New Zealand and Australia, it is concluded that in all these countries there are deficiencies, but Australia comes second to New Zealand in the success league. The notable Australian deficiencies are the lack of a broad-based consumption tax (Australia is now the only OECD country without one) and the fact that lower marginal rates of income tax have been achieved mainly because of falling real thresholds of the tax brackets.     

Envelope and sensitivity analysis ‘in the large’

New results on global sensitivity analysis are derived. Relying on the saddle-point characterization of the Lagrangean, simple yet powerful results are shown to hold under general conditions. A generalized envelope result is obtained. It does not require differentiability assumptions or unique solution, and it holds for discrete changes.     

THE POST-KEYNESIAN ‘DEMAND FOR CREDIT’ MODEL*

The post-Keynesian ‘demand for credit’ model is a well-cited piece of empirical evidence to support the contention that the money supply is endogenously rather than exogenously determined. In this paper, the model is critically examined and found to be problematic in several ways. Cointegration techniques are used to estimate a similar model using Australian data.     

The ‘New Federalism’ and Horizontal Equalization*

Under Stage I of Australia's ‘New Federalism’ policy a given share of Commonwealth tax revenue is to be distributed to the States. This paper examines the States (Personal Income Tax Sharing) Act 1976 and proposes a concrete fiscal equalization criterion consistent with the provisions for equalization in the Act. Distribution models proposed in Mathews (1979) and Commonwealth Grants Commission (1981) are examined and shown not to satisfy this criterion. An alternative is presented.     

Entry Threats and Inefficiency in ‘Efficient Bargaining’

We study limit pricing in a model of entry with asymmetric information, where the incumbent firm's wage is endogenously determined through ‘efficient bargaining’ with its union. In the presence of entry threat, the incumbent firm‐union pair may face a conflict between rent sharing and transmitting its cost information. When the wage is not observable to outsiders and employment is the only signalling instrument, over‐employment features in all entry deterring contracts. When the wage is also observable, information transmission becomes easier. Most of the time, then, but not always, the efficient contract deters (induces) entry against the low (high) cost incumbent.     

Comments on ‘The state of macroeconomic forecasting’

The paper by Fildes and Stekler provides an overview of empirical results in macroeconomic forecasting. They do not address three key issues: (1) the importance of data revisions and the use of real-time data; (2) the statistical significance of differences between forecasts; and (3) the role of macroeconomic theory in formulating and evaluating macroeconomic forecasts.