Forward Planning and Stability of the Australian Migration Program

Should the Australian immigration intake be forward-planned and, if so, should the resulting intake be numerically stable through time? There are sound reasons for anticipating the effects of current intakes on future intakes and for basing current intakes on Australia's long-term national objectives. These policy requirements imply a case for forward planning but not the need for a stable intake. Appropriately designed numerically unstable intakes are preferable to stable intakes because instability, while introducing adjustment costs, avoids more significant losses due to reduced selectivity in the entry mix.     

LONG-RUN RELATIONS IN EXCHANGE MARKETS: A TEST OF COVERED INTEREST PARITY

We examine long-run relations implied by covered interest parity (CIP) in possibly cointegrated and nonstationary data series. Empirical evidence suggests that, ignoring market imperfections, CIP failed over January 6, 1984, through December 6, 1991, using weekly data from four major currencies relative to the U.S. dollar. The multivariate maximum likelihood vector autoregressive (VAR) methodology does not require data differencing and hence retains valuable information lost in previous research examining international market flows. Rejections are robust to both subperiod analysis and alternative interest rate series. Although test rejections are highly statistically significant, attainable economic profits appear small. Practitioners will find economic profits inconsequential relative to reasonable bounds on market frictions such as transaction costs. Nonetheless, the use of CIP to determine forward rates identically from interest rates and spot rates in academic studies is called into question.     

University of Laneaster

L. J. White , The Automobile Industry since 1945, Cambridge, Massachusetts: Harvard University Press, C. K. Rowley , Steel and Public Policy. London: McGraw-Hill, 1971 J. B. Heath (ed.), Department of Trade and Industry, International Conference on monopolies, mergers and restrictive practices, Papers and reports, Cambridge. 1969. London: C. F. Pratten , Economies of Scale in Manufacturing Industry. Cambridge: Cambridge University Press, 1971 A. Singh . Takeovers, their relevance to the stock market and the theory of the firm. Cambridge: Cambridge University Press, 1971 D. Coombes , State Enterprise. Business or Politics? London: Allen & Unwin, 1971     

Challenges in quantitative economic analysis in support of multilateral trade negotiations

A wide range of economic analysis of agricultural trade liberalization was performed prior to and during the Uruguay Round of trade negotiations. Views differ as to the effectiveness of this research, although most would agree that it became less relevant as the negotiations progressed. This paper reviews the contributions of economists to the trade liberalization debate, with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization. With a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future. The authors conclude that the Uruguay Round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization. In addition, new issues will be added to the agenda of the next round of negotiations. These include: trade and the environment, competition policy and intellectual property rights. It is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums.     

Pricing over the Cycle

In recent studies, the cyclical behavior of markups is examined, but the role of costs in determining markups is ignored. Here, a pricing equation is estimated that implicitly measures the rate of change in markup as a function of aggregate demand growth, aggregate inflation and industry cost inflation. Results for 21 two-digit SIC industries in the U.S. over 1948 to 1979 show incomplete pass-through from cost into price, implying a negative relationship between cost and the markup. Aggregate inflation positively influences prices and markups. Aggregate demand negatively influences prices and markups in highly concentrated industries, but not otherwise.     

Value of digital information networks: a holonic framework

The worldwide extraordinary level of interest in digital information networks’ deployment among nations is due to the strong perception that they bring economic, social and environmental value. Our literature review on studies aiming at clarifying the value of information networks, led us to conclude that these studies take speculative, elusive or limited conclusions. We identify the requirements to capture the value of information networks and indicate a possible theoretical ground to account for it. Based upon this, we propose a framework operationalized with data from Eurostat. Furthermore, we identify the added-value of our framework with a precise and comprehensive comparison with two state of the art reference frameworks. We demonstrate that our framework provides significant conceptual added-value and, more fundamentally, allows for traditional measures of economic value (e.g. productivity and growth), as well as for other measures of value (e.g. social and environmental). Finally, we demonstrate with examples the wider application range of our framework in comparison with existing work.     

Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence

Studies routinely document that immigrant employment concentrates in non‐traded goods sectors and that many immigrants have low inter‐sectoral mobility. We consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation's pattern of production and trade. We model an economy producing three goods; one is non‐traded. Domestic labor and capital are domestically mobile but internationally immobile. Allowing that some new immigrants will become specific to the non‐traded goods sector, the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants. Empirical investigation in a panel data set of OECD countries supports the model's prediction that immigration raises the output of non‐traded goods. Consistent with the model, we also find that immigration and trade are complements. Given its empirical support, the model's implications for immigration policy are then discussed.     

COMPETITION AND SOCIAL HOUSING IN EUROPE

This article discusses the application of the concept of competition to social housing in Europe. A distinction is made between competition amongst social housing suppliers and between social housing organisations and commercial suppliers of housing. The competitiveness of social housing is examined using evidence mainly from England and the Netherlands.