Empirical studies using survey data on expectations have frequently observed that forecasts are biased and have concluded that agents are not rational. We establish that existing rationality tests are not robust to even small deviations from symmetric loss and hence have little ability to tell...

The overall economic efficiency of a quantity-based approach to greenhouse gas mitigation depends strongly on the extent to which such a program provides opportunities for compliance flexibility, particularly with regard to the timing of emissions abatement. Here I consider a program in which...

This paper examines the relationship between default on sovereign borrowing and the expropriation of foreign direct investment in both theory and in practice.

We define regulatory risk as any regulatory action that leads to an increase in the cost of capital for the regulated firm. In a general equilibrium setting the paper considers the impact of globally harmonising capital adequacy requirements on the cost of bank equity capital. The results show...

Like many industrialised economies in the pre-depression era, Australia elected to maintain a highly protectionist trade policy regime and hence to retard its integration with the global economy. The rationale for Australia’s protectionism was, as elsewhere, the enhancement of worker welfare....

We study optimal capital taxation under limited commitment. We prove that the optimal tax rate on capital income should be positive in steady state provided that full risk-sharing is not feasible. In a limited commitment environment, a one unit increase of capital investment by an agent...

When market distortions already exist, producers may attempt to surpress or encourage the establishment of new distortions in hitherto undistorted markets, and may have a strong incentive to appeal to the language of second best to further their private interests. In these situations, the total...

Australia’s relationship with Indonesia became strained after Indonesia’s declaration in 1963 of confrontation’ (konfrontasi) with Malaysia. During 1964-65, Australia was engaged in a covert war against Indonesia, but it continued to give aid to the country. This ambiguity in Australian...

demographic transition have led to accelerated ageing of populations in developed countries and in several advanced developing countries. This paper introduces a global demographic model from which emerge the implications of these changes for population sizes, age distributions and gender...

Contests are games in which the players compete for a valuable prize by exerting effort or using resources so as to increase their probability of winning. This paper examines two player multi-item contests, a class of games in which players are faced with a decision about how much of a given...