Public Policy for Growth and Poverty Reduction

In this paper, I would like to outline an approach to publicpolicy that focused on fighting poverty and is based on an understandingof growth and development. Such a public policy requires answeringtwo key questions. First, what are key determinants of a developmentthat benefits poor people – or what has been labelled"pro-poor growth"? And second, we need to answer the policyquestion: how can public action influence the key determinantswe identify? In putting the questions this way, we are settingourselves the task of building a dynamic public economics –a public economics of development. Given that development isthe objective, this task will require a better understandingof how to measure it. And we must also achieve a better graspof changes of behaviour in the process of development, sincechanging perspectives and behaviour are usually an integralpart of the development story. In laying our task of advancinga dynamic public economics, however, let me emphasise that shouldbe building – on – not overturning – pasttheory. In much of the work I will describe, the empirics seemto be ahead of theory. Thus one of my purposes is to highlightsome elements of an agenda for theoretical research. (JEL E6)     

Must the growth rate decline? Baumol's unbalanced growth revisited

According to Baumol's model of unbalanced growth, if resourcesare shifting towards industries where productivity is growingrelatively slowly, the aggregate productivity growth rate willslow down. This conclusion is often applied to the advancedeconomies, where resources are indeed shifting towards the relativelystagnant service industries. But Baumol's conclusion only followslogically if the stagnant industries produce final products.If instead they produce intermediate products, the aggregateproductivity growth rate may rise rather than fall. This isempirically relevant since the most rapidly expanding serviceindustries, e.g. business services, are producing mainly forintermediate use.     

Weight and welfare of Australians, 1890-1940

Views differ on whether living standards in Australia improved between 1890 and 1940. The pessimists, relying principally on product and incomes measures, argue that living standards stagnated; the optimists, using augmented measures of well-being, argue that living standards may have improved. This paper contributes to this debate between the pessimists and optimists by using alternative measures of living standards, namely the height and body mass index (BMI) of male Australian army recruits of World Wars I and II. The nature and usefulness of these measures is examined. The major findings are that the height data indicate an unequivocal improvement in living standards in the period under consideration. The BMI data tend to support a similar conclusion, but the results are ambiguous and there are difficulties in using them alone to determine exactly what happened to living standards.     

Inoculation theory and resistance to persuasion in marketing

Marketing has benefitted tremendously by psychological theories of persuasion. Unfortunately marketers have not taken full advantage of the psychological perspectives upon instilling resistance to persuasion. The purpose of this paper is to provide a review and analysis of the extant research in psychology and marketing pertaining to resistance to persuasion. Directions for future research are also discussed.     

Bank risk and real estate: An asset pricing perspective

While a number of papers have investigated the time-series behavior ofex post bank stock returns and real estate returns, no study has comprehensively studied the relationship betweenex ante risk premiums on both assetsand the time-varying nature of such premiums in relationship to economic and real estate market conditions. In this study, we investigate how the changing nature of bank risk taking, especially in the real estate market, has affected theex ante pricing of risk in the market for bank stocks. We find that the time variation in bank risk premiums are partly determined by interest rate and real estate market conditions. We also discover that the real estate factor has been important for banks in the 1980s.     

Gold loans in the Australian gold mining industry: Do gold loans allow gold producers to increase leverage?

This paper tests the hypothesis that gold producers exhibit greater leverage where gold loans are used. As the choice of gold producers and the study period essentially avoids debt tax shield effects, the paper focuses on information asymmetry and agency costs explanations for leverage. Theory suggests hedging can reduce the cost of debt but it has little impact if management is not committed to adopting the promised hedging policy. The implicit hedge in gold loans commits management to hedging and so greater leverage is expected for producers adopting gold loans. Results from the analysis are consistent with this hypothesis.     

Equilibrium Search Models and the Transition From School To Work

This paper applies the Burdett–Mortensen (1998) equilibrium search model to study the school to work transitions of U.S. high school graduates. We consider the case of discrete firm heterogeneity and provide a computational method to obtain the MLE. Our results show that unemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs. Importantly, employed blacks and whites receive job offers at the same rate. Assigning the whites' search parameters to the blacks and re-solving reveals that 75 percent of the observed wage differential is explained by the job destruction rate differences.