ARMY RECRUITING IN A CHANGING ENVIRONMENT

Army recruiting is sensitive to fluctuations in labor market conditions. Declines in unemployment over the past several years have led to decreases in the number and quality of enlistments. The Army has several discretionary policy tools that it can use to reduce cyclical variations in recruiting. However, budget constraints and other external requirements often limit the flexibility of these tools. More recently, the recruiting outlook turned favorable for the Army, primarily due to planned reductions in end strength. These reductions imply a 20 to 30 percent drop in total enlistment requirements over the next several years compared with 1989 levels. The danger is that dramatic budget cuts will impair the manpower quality goals of recruiting. Recruiting cuts alone should not be the only means of meeting end-strength reductions to 1995.     

Debt,Credit and Monetary Targeting in Australia*

The purpose of this paper is to examine the case for debt targeting in Australia. This issue has recently attracted considerable policy interest, especially in the US, in view of the acceleration and diffusion of new financial products and processes which have tended to undermine the existing monetary aggregates. A series for broad credit (defined as outstanding indebtedness of all non-financial sectors) is constructed and its behaviour and that of its components is discussed and analyzed. A variety of empirical techniques based upon the predictability criterion are employed to show that, unlike the US, no case can be made to support the use of broad credit as an intermediate target in Australia. Bank credit and M3 are found to perform reasonably well as intermediate targets.     

The Privacy Paradox: Personal Information Disclosure Intentions versus Behaviors

Impelled by the development of technologies that facilitate collection, distribution, storage, and manipulation of personal consumer information, privacy has become a “hot” topic for policy makers. Commercial interests seek to maximize and then leverage the value of consumer information, while, at the same time, consumers voice concerns that their rights and ability to control their personal information in the marketplace are being violated. However, despite the complaints, it appears that consumers freely provide personal data. This research explores what we call the “privacy paradox” or the relationship between individuals’ intentions to disclose personal information and their actual personal information disclosure behaviors.     

Rational Expectations and the Defris-Williams Inflationary Expectations Series*

This paper evaluates the Defris-Williams inflationary expectations series as a measure of rational expectations for the period 1973(1) to 1980(2). The results show that the series violates the rationality criterion, being an inefficient and biased predictor of inflation. By constructing an ‘information-augmented’ D-W series, the quantitative importance of omitted information available to consumers at the time of making their forecasts is isolated. The key omitted economic variables are found to be lagged monetary growth and unemployment or an indexation dummy which explains 70 percent of the forecast error of the D-W series. These results suggest that a theoretically constructed expectations series may prove to be a superior measure of market expectations of inflation in Australia.