The econometric technique of cointegration is used to model the aggregate demand for imports in Australia over the period from September 1974 to September 1989. We find that movements in total and endogenous imports are well explained by movements in domestic demand, the relative price of...

By international and historical standards, Australia does not appear to be under-capitalised. Nevertheless, the past decade has seen a clear reversal of the steady upward trend in capital intensity; this reversal was most marked after the short-lived increase in capital spending associated with...

The cost of capital is a potentially important determinant of business investment, yet there have been few attempts to provide an adequate measure of it. In this paper the importance of the cost of capital and weaknesses inherent in existing measures are discussed. A new series for the cost of...

In the second half of 1997 many Asian emerging economies suffered large declines in both their currency and equity markets. This Asian financial turmoil arose primarily from three interrelated sets of factors, namely: shortcomings in the financial sector at a time when global liquidity...

International bank lending is a major component of capital flows between advanced and emerging economies. However, in recent years these flows have been going the wrong way, like water flowing uphill. Even four years after the Asian crisis, there is a net flow of funds from emerging economies to...

A number of concepts of 'competitiveness' are applied to national economies, not always clearly or helpfully. This paper suggests a possible taxonomy of these concepts, and applies them to Australian data. Australia performs well on the internal competitiveness of its markets. It also does well...

Major shifts in the global economy — such as rapid growth in global commodity prices associated with the emergence of China and other countries — are leading to changes in Australia’s international income flows. This is attracting an increasing amount of attention as the net income deficit...

This article examines Treasury's macroeconomic forecasting performance over the period from 1989-90 to 2003-04, with a focus on forecasts of nominal and real GDP, the GDP deflator, the unemployment rate, and CPI inflation.