Monash University > Business and Economics > Research

Completed ARC Discovery and Linkage Research Projects

Department of Accounting and Finance

A complex systems approach to modelling time-varying risk in the presence of market frictions
ARC Discovery Project 2003-2005
Prof R Faff, Prof R Brooks, A/Prof T Fry
Risk and return are two fundamental variables underlying all business decisions. Risk is difficult to measure - potentially leading to sub-optimal outcomes needlessly wasting $millions. This project focuses
on two important data problems in risk measurement - thin trading and price limits - applying a complex systems approach. Specifically, we develop a new time varying risk estimator from the class of
generalised Tobit models - popular in other areas of economics. Using data across several markets, the new risk measure will be developed, applied and compared to existing approaches. This will improve future decision-making - delivering considerable long-term economic benefits.

A wavelet multiscaling approach to multifactor asset pricing models
ARC Discovery Project 2005-2007
Dr FH In; Prof RW Faff
Risk and return are two fundamental concepts underlying business decisions involving $millions daily. Even for publicly listed companies risk is difficult to measure, particularly when the time dimension over which decisions are being made is ill-defined - potentially leading to sub-optimal decisions. This project focuses on the time scale question by developing an innovative methodology (based on wavelet multiscaling) that improves our understanding of risk and return. The project will help enhance risk control, and provide improved tools and knowledge to aid formation of superior globally diversified portfolios over different time scales - thereby delivering considerable long-term economic benefits.

Cycles and size: Long term valuation and investment performance
ARC Linkage Project 2005-2007 with industry partner: Acorn Capital Ltd
Dr HW Chan (Melbourne); Prof RW Faff; Prof Dr P Kofman (Melbourne)
This project will significantly enhance our understanding of the cyclical variation in the returns and volatility of size-related equity classes. A better understanding of these cyclical phenomena may also lead to improvements in the asset allocation process, in particular the investment in medium- and small-sized enterprise shares. The current neglect by analysts and reluctance of institutional investors to research and invest in this sizable market segment offers significant opportunities for linkage research. This project will focus on the valuation, (il)liquidity, and macroeconomic sources of momentum profits as they related to the economic cycle, across the size spectrum.

The role of activity-based costing within the defence forces
ARC Linkage Project 2003-2005 with industry partners: Naval Postgraduate School, United States Coast Guard, Australian Navy
Prof RH Chenhall , Prof KJ Euske, Capt LR White, Mr AG Benbow
The aim of the research project is to enhance understanding of the implementation processes involved in the effective application of Activity-based Cost Management (ABCM) within Defence Organizations. A framework is developed that draws on organizational theories as they relate to behavioral implementation factors and change management. The research proposes that the beneficial effects of ABCM require attention to behavioral and organizational factors during the early stages of implementation. Attention to several of these factors provides the basis to overcome resistance to change in early implementation, while attention to others ensures sustained development and acceptance of ABCM.

Department of Business Law and Taxation

Venture capital (VC) and tax expenditure programs - An international comparative analysis of legal structures and benefits
ARC Linkage Project 2005-2006 with industry partner: Department of Industry, Tourism and Resources
A/Prof SL Barkoczy; A/Prof JS Glover (Monash Faculty of Law);
VC investment is an important catalyst for economic growth. Many governments, including the Australian government, have designed schemes to encourage VC investment. This project compares VC schemes that exist in OECD and ASEAN countries. It will focus on "tax expenditure programs" and will analyse their legal structures and benefits. The results will be used to benchmark Australia's main VC schemes - the "PDF program" and "VCLP scheme". The research is designed to discover insights into alternative ways of stimulating VC investment as well as suggest areas for potential law reform and structural change. Findings will be published in refereed journal articles and an independent report provided to the Australian Government.

Whistling while they work: Enhancing the theory and practice of internal witness management in public sector organisations
ARC Discovery Project 2005-2007 with industry partners: WA Parliamentary Commissioner for Administrative Investigations (Ombudsman), NT Office of the Commissioner for Public Employment, ACT Chief Minister's Department, Transparency International Australia, Commonwealth Ombudsman, Australian Public Service Commission, Qld Crime and Misconduct Commission, Queensland Ombudsman, NSW Independent Commission Against Corruption, NSW Ombudsman, WA Corruption and Crime Commission, WA Office of the Public Sector Standards
Dr AJ Brown (Griffith); A/Prof RK Wortley; Dr P Mazerolle; Dr RK Smith; Mr CC Wheeler; Dr JS Hocking; Mr GJ Ross; Mr P Roberts; A/Prof PS Latimer
The protection of whistleblowers and other internal witnesses to corruption, misconduct and maladministration is a great unsolved problem in public sector governance. Involving 11 integrity institutions, this first national study of internal witness management will describe and compare organisational experience under varying public interest disclosure regimes across the Australian public sector. By identifying and promoting current best practice in workplace responses to public interest whistleblowing, the project will use the experience and perceptions of internal witnesses and first- and second-level managers to identify more routine strategies for preventing, reducing and addressing reprisals and other whistleblowing-related conflicts.

Department of Economics

A Neo-Heckscher-Ohlin model of trade with endogenous production patterns
ARC Discovery Project 2005-2006
Prof XV Yang; Dr CG Tombazos
The ongoing debate regarding the expected benefits of the recent trade agreement with the United States exemplifies that few aspects of international trade are well understood. Using inframarginal analysis, an approach developed by co-investigator 1, we expect to be able to advance our understanding in this field by producing what is arguably the most generalised model of trade. This will constitute an important accomplishment that is likely to attract both international academic interest and international research funds to Australian research. In addition, as our model will be calibrated on the basis of our domestic production characteristics, our work will shed light on the socially optimum trade policy directions for Australia.

Increasing returns and economic efficiency
ARC Discovery Project 2005-2007
Prof Y Ng
The project attempts to increase the international profile of Australian research by extending the analysis of the challenging issues of economic efficiency in the presence of increasing returns. The proposed analysis takes account of both allocational efficiency and organizational efficiency. It will integrate the Dixit-Stiglitz model of the traditional analysis with the Yang-Ng-Shi model of the new framework to provide a more realistic analysis that allows for increasing returns in both home and firm/market production. This conceptual extension constitutes an advance that is of analytical value and will also be relevant for the formulation of public economic policy in the Australian setting and also more generally.

Land of the black stump: A history of Australia's inland corridor, 1815-2005
ARC Discovery 2005-2007
A/Prof AJ Mayne (Melbourne); Dr C Fahey; A/Prof R Frances; Dr LE Frost; A/Prof H Goodall; Dr J Gregory; Prof PA Grimshaw; Dr RQ Harrison; Dr RG Hosking; Prof RA Nile
This project explains the origins of key areas of current interest and concern about rural and regional Australia. It provides historical lessons that address four National Research Priority areas (sustainable water and land management, sustainable communities, technological innovation, Australia in regional and global context). The project highlights the historical importance to Australia of inland regions, industries, and communities which today are undergoing fundamental economic, technological, and social readjustments. The project identifies the relationships that bind urban and rural Australia yet problematise racial reconciliation. It brings together a national network of researchers and provides vocational training for students.

Privatisation, regulation and institutional structures of airports: An international study
ARC Discovery Project 2004-2006
Prof P Forsyth
Airports are typically locational monopolies possessing strong market power - abuse of this is controlled by public ownership, regulation or not-for-profit operation. All these pose problems for achieving economic efficiency while meeting environmental standards. Design of efficient regulation, and the Australian experiment with price monitored private airports, will be analysed. Using data from Australian and overseas airports, the performance of airports operating under the alternative systems will be evaluated, enabling an assessment of performance and privatisation; a comparison of private, public and not-for-profit systems; and pointing out how better governance options can be designed.

The social and business implications of extending China's social security system
ARC Linkage Project 2005-2007 with industry partner: Shanghai Municipal Labour and Social Security Bureau
Prof RL Smyth; Prof CT Nyland; A/Prof JC Zhu ; Dr GG Ramia; Dr G Davies
The Shanghai Bureau of Labour and Social Security (SBLSS) has introduced regulations that extend social security coverage to employees (including migrants) resident and/or working within the municipality of Shanghai but outside the city limits. These regulations are part of a reform program that aims to develop a comprehensive and sustainable social security system that will provide coverage to all of China's population; and one that draws on Australia's experience with social security management. The Bureau has asked us to partcipate in assessing the reforms, a research opportunity offered to no other body of scholars inside or outside China.

Valuing life and time in the knowledge economy
ARC Discovery Project 2005-2006
Dr G Sun; Prof Y Ng
This project will help increase the international profile of Australia scholarship in a burgeoning research area of increasing importance: valuation of life, time and health with particular emphasis on the effects of aging and the accumulation of knowledge. It will generate new insights and important welfare and policy implications, which are especially of interest to a knowledge economy like Australia, in which the demographic profile is experiencing a fundamental shift toward unprecedentedly high percentage of the aged population.

Social interactions, group dynamics, and the political economy of sovereign transgression: A laboratory investigation
ARC Discovery Project 2006-2007
Dr V-L Mui
Sovereign transgression for example, confiscation of citizens' wealth by the state can have a significant negative effect on economic performance. This project will study the under explored issues of how social interactions and group dynamics can affect the incidence of sovereign transgression and citizen resistance in a controlled laboratory environment. The substantive and methodological innovations can increase the Australian knowledge base. The project will facilitate collaboration between Australian researchers and international experts. It will also expose Australian undergraduate students to experimental economics, and provide graduate students with hands on training in using the laboratory method to study economic behaviour

Testing for age discrimination in hiring in the Australian labour market
ARC Discovery Project 2005-2006
Dr J Rich
This project will raise awareness in the community of the extent, or lack thereof, of age discrimination in the Australian labour market. This is particularly important as no other investigations of this nature have been made. The findings will provide a valuable and important complement to the surveys of employer's attitudes towards older workers. There will be policy implications for the structure and operation of anti-discrimination legislation in Australia. The technique of using written applications to apply for jobs can highlight deficiencies in the current legislation and ways in which the legislation can be modified to make it more effective.

Modelling decision making within the household and analysing its welfare implications: Methodological advances with policy applications
ARC Discovery Project 2004-2006
Prof R Ray; Prof P Maitra; Prof K Basu
The project examines the behavioural and welfare implications of alternative models of intra household decisions. A framework that integrates the household's earnings and expenditure decisions will be proposed and applied. The project introduces new measures of spousal power in making decisions and examines its impact on household outcomes. A satisfactory econometric methodology to test the conventional unitary model will be developed and applied. The usefulness of this research is underlined by examining the policy implications in areas that range from taxation in the developed country context to child health, child labour and gender bias in case of developing countries.

Analysis of the global price competitiveness of tourism with particular reference to Australia
ARC Discovery Project 2004-2006
Prof LM Dwyer; Prof PJ Forsyth
Price competitiveness is a key determinant of tourism flows, and this project will measure and explain global patterns in competitiveness. Building on earlier work by the investigators, it will expand the measures of competitiveness and develop a new method for measuring competitiveness in package tourism. Cross country differences in industry productivity are a primary reason why competitiveness differs; productivity will be measured using input and output prices. Patterns in productivity will be analysed, and the hypothesis that productivity varies inversely with real incomes, observed in other service industries, will be tested.

Department of Econometrics and Business Statistics

Analysis of drug consumption in Australia using new microeconometric techniques for unit record data
ARC Discovery Project 2005-2007
Dr MN Harris; Dr X Zhao ; Prof WE Griffiths
The consumption of licit and illicit recreational drugs and its adverse health, social and economic effects are everyday topics in Australian society. Much debate has surrounded government drug policies implemented through education, legislation and taxation. This study will provide comprehensive empirical knowledge of Australians' consumption of alcohol, tobacco, prescription drugs for non-medical purpose, and illicit drugs such as heroin and cocaine. It will help identify social, economic and demographic determinants of drug consumption, information which is invaluable for targeting drug policies and education programs. New microeconometric techniques will also be developed that have wide application in other fields.

Fractional integration, power laws and econometric models: Some methodological and theoretical developments
ARC Discovery Project 2004-2006
Prof D Poskitt
The fundamental objectives of this project are to: (i) Extend current econometric practice and consider the use of power laws as a basis for the construction of a more flexible and realistic class of models for the analysis of economic and financial time series. (ii) To develop inferential techniques appropriate for the modelling of dynamic econometric systems that incorporate structure characterized by power laws. This will be achieved by building upon the class of fractionally integrated processes. New econometric models and methodologies for the analysis of non-stationarity series will be developed, along with the associated theoretical results.

Inference in partially non-stationary time series models
ARC Discovery Project 2003-2005
Prof F Vahid (ANU), Prof D Poskitt
Economic theories typically specify the long-run relationship between economic variables. However, researchers usually examine the long-run features of the data by fitting a restrictive class of models
using criteria that have only proven useful for short-term forecasting. In this project we consider alternative models and modelling strategies that are appropriate for the study of the long-run. We also develop computer intensive (bootstrap) methods, which will provide a much-needed improvement over the existing (asymptotic) methods for making inference about the long-run. Our research will lead to more reliable models for long-term planning in business, industry and government.

Modelling multivariate financial time series using copulas
ARC Discovery Project 2004-2006
A/Prof P Silvapulle, Prof M Silvapulle
What are the chances that the losses in the market value of investments exceed the anticipated levels? Given that one country's financial market collapsed, what are the chances that it would lead to financial crises in other countries? These questions often arise in risk management and international finance. This project takes a significant step forward from the existing literature to develop new flexible and innovative methods to answer the foregoing type of questions. Further, this project proposes new measures of market risks that are suitable for communicating to the broader public as well as the experts.

New approaches to the analysis of count time series
ARC Discovery Project 2004-2006
Dr G Martin, A/Prof R Snyder, Prof R Hyndman
The focus of this proposal is on the analysis of data that enumerate events over time. Occurrences of such count data abound in economics and business, examples being observations on insurance claims, loan defaults and individual product demand. This project develops a suite of innovative methods for modelling and predicting event counts. The methods explicitly accommodate both the discreteness of the data and possible complexities in its evolution over time. In so doing, they enable both accurate inferences regarding the dynamic structure of the data to be drawn and accurate forecasts of future event counts to be produced.

Nonlinear and nonstationary time series econometrics: Theory and applications
ARC Discovery Project 2005-2007
Dr J Gao; Prof Dr ML King; Prof D Tjostheim
The outcomes of this project will not only complement but also enhance the existing research strengths of Australian researchers in time series econometrics. Such a research goal falls within the National Research Priority 3 (PG1). In addition, our models will be applicable in stablizing the national financial market for more accurate forecasts. This falls within the National Research Priority 3 (PG5). The research outcomes will also provide novel models to respond to climate change and variability and to provide accurate warming estimates for improving the policy making process. This falls within the National Research Priority 1 (PG7)

Department of Management

An investigation into consumer perspectives on emotional, attitudinal and behavioural loyalty
ARC Linkage Project 2004-2007 with industry partners: Colmar Brunton, Golden Caskett Lottery Corp, WorkCover QLD
Prof C Hartel, Ms R Bennett, Mr I Walkley, Mr S Cierpicki, Dr S Worthington
Attracting and retaining loyal customers is central to the economic viability of organisations. Yet, scholars have not resolved how to define brand loyalty, what contributes to brand loyalty for different services, products and industries over time nor the appropriate application of brand loyalty measures in different contexts. Current conceptualisations overlook the role of emotion and its relationship with the other dimensions of brand loyalty. The proposed project will be the first application of a prototype approach and one of the few studies to use quantitative longitudinal research techniques to further understanding of what brand loyalty is and how it develops.

Business social protection behaviour in China
ARC Linkage Project 2004-2006 with Industry Partner: Shanghai Municipal Labour and Social Security Bureau
Prof CT Nyland, Dr RL Smyth, Dr JC Zhu
Employer social protection behaviour is an under-researched field because analysts are seldom able to attain adequate enterprise data. Our industry partner will enable us to overcome the data problem by providing relevant information on the revealed behaviour of 5000 firms per year for three years. This project pioneers the utilisation of firm specific data to analyse this issue using data from Shanghai. The research will assist China to operationalise its decision to model its emergent social security system on the Australian security regime and will assist Australia's financial community to capture the opportunities made available by this development.

Determinants of researcher productivity and impact over career lifespan
ARC Discovery Project 2006-2007
Dr A Pirola-Merlo
As Australia's population is ageing at one of the fastest rates among OECD countries, it is imperative to understand the relationship between age and worker productivity. This project will develop our understanding of how age relates to productivity not only in terms of quantity but also quality of innovations produced. It will also identify personal and contextual influences on productivity. This will help identify ways of supporting productivity and participation among older workers. Additionally, this project will provide a sophisticated framework for developing cultures and work environments that are supportive of innovation, by modelling the dynamic interplay between individuals and their environments across several years.

Environmental interpretation: Towards a globally relevant model for communicating with tourists from culturally diverse backgrounds
ARC Linkage Project 2003-2005 with Industry Partner: Phillip Island Nature Park
Prof BV Weiler, Prof SH Ham
Environmental interpretation, a widely accepted approach to communicating with tourists in North America, Latin America and the U.K., is based on communication research undertaken mainly by
researchers in western cultures or focused on Anglo-Saxon audiences. This project advances theory and practice by critically examining the relevance of this model for communicating with visitors from a range of cultural backgrounds. Environmental messages, communication media and the application of environmental interpretation principles are experimentally manipulated to evaluate their relative effectiveness in communicating with international and domestic visitors from culturally and ethnically diverse backgrounds, as a basis for refining the model for wider application.

The social and economic security of international students in the global education market
ARC Discovery Project 2005-2007
Prof CT Nyland; Prof SW Marginson; Dr GG Ramia; Mr M Gallagher
Social and economic security is a prime factor in decisions by international students to select Australia as a study destination. It is also central to the long term trajectory of Australian exports. In the international education market security issues have assumed greater importance and urgency in that through 2003 Australian universities lost half of their prior price advantage vis a vis US universities via appreciation of the Australian dollar. Given that the educational product itself is little different to that of the USA and the UK, differentiation on the basis of student security is likely to be crucial. Yet so far there has been no academic research on student security, and a limited policy focus only on selected aspects.

Small business job creation: Employer and employee perspectives of job quality
ARC Discovery Project 2004-2005
A/Prof R Barrett
Small business is high on the policy agenda as employment growth is trending downwards. Recent recommendations to increase small business employment highlight the importance of both quantity and job quality. This project will investigate what is a quality small business job from employer and employee perspectives. The research will focus on new small business jobs in the Latrobe Valley - a 'less favored' region. The findings will fill a significant gap in knowledge about the process of job generation and lead to a better understanding of the determinants of job quality from different perspectives,
which can assist economic policy development.

Work and social cohesion under globalisation
ARC Linkage Project 2005-2007 with industry partners: National Australia Bank Limited; Australian Council of Trade Union; Members Equity; Multiplex Constructions Pty Ltd; Schneider (Australia) Consulting; Ernst & Young; Corrs Chambers Westgarth; Linfox.
Prof D Samson (Melbourne); Mr RH Gough; A/Prof JW Benson; Dr JR Doughney; Prof AF Rainnie; Dr ML MacIntosh
The project will explore how innovation and improvement in productivity can be accommodated with notions of fairness at workplace and industry level. The impact of increasingly competitive markets on the nature of work and society and the relationships between employers and employees in five industries: finance, tourism, health, ICT and automotive components, will be examined. The views of a wide cross-section of employees and managers in five key industries, complemented by existing survey data, will be analysed. A major outcome will be five industry workshops promoting productivity, partnership and social cohesion in a competitive global environment. Policy implications for the wider economy will be developed in the final report.

Diverse teams and health care - Problem or cure?
ARC Discovery Project 2004-2006
Dr E Wilson-Evered; Professor CE Hartel; Prof LW Powell; Asst Prof ML Van Engen; Prof MA West
Research that is able to improve the quality of work life and patient care of health care professionals is vital to communities around Australia where work pressures placed on healthcare professionals are at an all time high as are shortages of qualified personnel. The research team brings together leading edge researchers in healthcare management, diversity, teamwork and workplace management. The project will result in a comprehensive description of the types of diverse teams working in hospitals, policy and practice and will make recommendations for diversity management in the healthcare system, and the development of new international research collaborations in hospital research and development.

Department of Marketing

A protocol for customer relationship management implementation and evaluation
ARC Linkage Project 2004-2006 with Industry Partner; Simon Richards Group
A/Prof PC Dubelaar, Prof MT Ewing, Prof M Gabbott, Mr JR Pearce;
In 2001, companies worldwide invested US$20 billion (US$125 billion by 2004) in Customer Relationship Management (CRM). Despite the magnitude of this investment, the general consensus among practitioners is that most CRM systems have failed to live up to expectations. This is somewhat alarming, given that the theoretical underpinnings of relationship management are both well developed and intuitively sound. This project investigates the contradiction between relationship theory and CRM practice. It will identify and synthesise critical factors in the success or failure of attempts to implement CRM as a preliminary stage to developing a protocol for successful CRM implementation and evaluation.

Effects of experiential retail strategies on store patronage and consumer purchase behaviour
ARC Linkage Project 2004-2007 with Industry Partner: Paintright Ltd
Prof H Oppewal; Mr MB Beverland
Recent years have seen an increased interest in industry and academia in what is known as 'experiential retail'. Not much is known however about what generates and determines a retail experience from the consumer's point of view and what are the short and long-term effects of such a strategy on consumer behaviour. This study will examine these issues by way of a field experiment conducted in stores of PAINTRIGHT, a cooperative of specialist paint retailers. A survey approach will be complemented with extensive qualitative investigation to allow a better understanding and assessment of the effects of experiential retail strategies.

Modelling consumer decision states
ARC Discovery Project 2004-2006
Prof H Oppewal, Dr M Morrison, Dr DS Waller, Dr PZ Wang
This research will examine the evolution of consumer decision states as products/categories mature and investigate how choice experiments can be developed to predict new product choices. Technological developments have made it feasible to expose large numbers of respondents to choice experiments enhanced with a process of Information Acceleration. A longitudinal experimental approach is proposed that monitors consumers' awareness, consideration and choice for one mature and two new products. This will allow for the developing of models that take into account the different rates at which consumers progress through decision states, leading to improved forecasts of new product trial and adoption.

The weighty issue of childhood obesity: An investigation of the role of junk food advertising
ARC Discovery Project 2005
Prof RJ Donovan (Curtin); Dr CM Roberts; Prof MT Ewing
Australian children have been getting continuously fatter since the 1970s. The direct health cost implications amount to $830 million annually. Most fat kids also become fat adults, suggesting a future health crisis in Australia. Junk food advertising is extremely heavy during children's television and is thought to contribute greatly to childhood obesity because children are highly susceptible to the suggestions of ads. The present research will help policy makers decide the most appropriate regulation of food advertising to children, and has the potential to reduce the proportion of Australian kids who are fat, thereby saving billions of dollars in health costs.

Using advertising to negatively reconstruct memories of risky and high-risk drinking amongst Australia's youth : A new intervention strategy
ARC Discovery Project 2005
Prof RJ Donovan (Curtin); Prof T Stockwell; Prof MT Ewing; Dr R Ouschan-Macrae
The NHMRC recognises alcohol-related problems as one of Australia's most serious health problems. Binge-drinking in particular is endemic amongst the population, especially youth, with such behaviour resulting in enormous economic, social and emotional costs to our nation. This study works towards reducing binge drinking amongst youth by assisting the development of more effective counter-advertising campaigns that make young people's memories of binge-drinking less enjoyable & more unpleasant. It also assists relevant advertising regulators & key decision-makers to take action to ensure that alcohol ads do not spawn primarily attractive memories of binge-drinking experiences.

Centre for Health Economics

Development of a value of life framework to assist priority setting decision making across sectors
ARC Discovery Project 2003-2005
A/Prof L Segal
The techniques used to evaluate life-saving interventions differ between health and other sectors. In health cost-effectiveness or cost-utility analysis is common, avoiding specification of a value for life. In contrast the transport and environment sectors use cost-benefit analysis and value life in monetary terms. This duality of approaches has resulted in a lower implicit value of life in the health sector. The research will explore these differences and attempt to identify key attributes that influence how life is valued, to provide a framework for a single approach to the valuation of life, and the more efficient allocation of resources cross-sectorally.

The identification and measurement of equity and other health sector objectives
ARC Discovery Project 2003-2005
Prof J Richardson , Dr R Hurworth
The project will investigate public expectations and values about the health system. The results will: (i) challenge the recent WHO evaluation of health systems in which 75 percent of the total score came from objectives other than population health; (ii) provide policy makers with numerical scores to indicate the relative importance of different broad objectives (such as access and the distribution of health services and the question of access to services); (iii) provide health service researchers with numerical scores to indicate where there are higher priority services or recipients: for example, the young or those with long term disabilities.

Centre of Policy Studies

Economic modelling for Australian and the USA: Forecasts, policy analysis and comparative studies of technology and labour market adjustment
ARC Linkage Project 2003-2005 with Industry Partner: Productivity Commission
Prof P Dixon
This project involves: a fundamental overhaul of MONASH, a widely used detailed dynamic model of the Australian economy; the creation of MONASH-USA for the United States; and several model-based Australia/US comparisons. MONASH's database and parameters will be updated, and its theoretical specification improved. MONASH-USA will be an advance over existing US models and will generate policy results of interest both in the United States and Australia. MONASH-USA will have an excellent database and is likely to produce insights on parameter estimation. These will be applicable in Australia. Together, MONASH and MONASH-USA will facilitate comparative studies of technology and labour-market performance.

Evaluating the sources of growth and decline in Australia's State economies via historical/decomposition simulations with a dynamic multi-regional fiscal model
ARC Discovery Project 2004-2006
Prof P Dixon, Dr J Giesecke
Australia's State economies have experienced wide disparities in economic growth rates. Little research has been undertaken on the underlying forces responsible for this. Nevertheless, State and Commonwealth governments spend several $billion annually on policies with the ostensible aim of promoting State growth. Disparities in growth rates also contribute to potentially costly movements in population, and (by promoting perceptions of unequal outcomes from policy change) may hinder the inter-government cooperation required for many beneficial policy changes. This project aims to develop a dynamic 8-region CGE model of Australia, and use it to investigate the causes of relative state economic performance.