Immigration and Unemployment*

The wisdom of maintaining high levels of immigration into Australia has been questioned, particularly on the grounds that migration contributes to aggregate unemployment. This paper uses both statistical causality techniques and conventional structural models to investigate the relationship between immigration and unemployment in the post-war period in Australia. The tests find no evidence of any association from migration to unemployment, though there is strong evidence of a significant effect of Australian unemployment on migration. The results indicate that immigration policy should not be dictated by unfounded fears of immigration causing unemployment, at least over the range of previous Australian experience.     

"PROTECTION AND REAL WAGES": THE HISTORY OF AN IDEA

Few economics articles have achieved the celebrity that still attaches to the paper, "Protection and Real Wages", by Wolfgang Stolper and Paul Samuelson in (1941). In this paper I discuss how the Stolper-Samuelson theorem has been re-interpreted over subsequent decades, and how attempts to generalize the theorem to higher dimensions have met with qualified results. The theorem leads to a simple proposition in political economy: in competitive models any productive factor can have its real return increased by a non-transparent policy whereby relative commodity prices are altered if there are enough commodities and joint production, is not too severe.     

La Femme Media Inc.: Identifying and Managing Audit Engagement Risk Factors

La Femme Media Inc. (“La Femme”) is a privately owned Canadian publishing company that produces several small periodicals and a popular women’s monthly magazine. The company’s founder and majority shareholder has announced his plans to retire in the upcoming year with plans to sell his 80 percent share of the company to a minority shareholder who has not taken an active role in the business. Students are required to take on the role of the audit senior and draft a planning memo for the partner outlining the risks associated with this engagement and analyzing all significant audit and accounting issues.     

Accounting for a Shift in Term Structure Behavior with No-Arbitrage and Macro-Finance Models

This paper examines a shift in the dynamics of the term structure of interest rates in the United States during the mid-1980s. We document this shift using standard interest rate regressions and using dynamic, affine, no-arbitrage models estimated for the pre- and post-shift subsamples. The term structure shift largely appears to be the result of changes in the pricing of risk associated with a "level" factor. Using a macro-finance model, we suggest a link between this shift in term structure behavior and changes in the dynamics and risk pricing of the Federal Reserve's inflation target as perceived by investors.     

CROSSING DUPUIT'S BRIDGE AGAIN: A TRIGGER POLICY FOR EFFICIENT INVESTMENT IN INFRASTRUCTURE

This paper borrows Dupuit's parable of a bridge so as to reexamine the problem of selecting and financing public investment projects in a dynamic and strategic setting. A regulator imposes a price ceiling, and a firm makes a sunk investment each period. Three simple examples reveal the connection between the non-cooperative equilibrium of this relationship and the second-best optimum. One cannot implement this "planning solution" generally since the firm and the regulator each behaves opportunistically toward the other's irreversible actions. The facility never will be built if investment in it is infinitely lumpy and if the facility is perfectly durable. Departing from this extreme case, however, one can restore proper incentives by adopting "trigger policies." The regulator responds to a deviation from a candidate path by cutting price down to operating cost, and the firm halts all investment. If capital does not depreciate too slowly and the future is not discounted too much, then one can approximate the planning solution by an equilibrium. The success of trigger policies suggests that reformers should relax many regulatory rules and procedures to support efficient investment in infrastructure.     

A Measure of the Value of Marketing in Packaged Goods

This article presents an econometric methodology for use with scannerpanel data based on the multinomial logit model to estimate theconsumer welfare changes that result from changes in marketingactivity. Two applications of the model are presented: the value toconsumers of the introduction of the first plastic ketchup bottle andthe value of various changes to the choice set for yogurt, including abrand replacement, the addition of a new brand and a line extension.Consumer welfare gains associated with the changes, while statisticallysignificant, are very small.     

Employee Participation,Ownership, and Productivity: A Theoretical Framework

A new conceptual framework to define and differentiate among diverse forms of employee ownership is developed. Two central rights associated with ownership, return and control rights, are identified. Their impact on individual motivation, individual performance, organizational structural variables and organizational performance is evaluated. We show how, over certain ranges of combinations of control and return rights, the relationship between alternative ownership arrangements and organizational performance may be nonlinear. The implications for the introduction of employee ownership and the evaluation of empirical work are considered.     

House Price Measurement: The Hybrid Hedonic Repeat-Sales Method

This article supplements James Hansen's (2009) recent article on the measurement of house prices in Australia. It provides a specific outline of the hybrid hedonic repeat-sales measure, a model which combines the hedonic and repeat-sales approaches examined in Hansen.