Abstract This article summarises developments in the Australian economy 2020. It describes economic growth and labour market ramifications associated with COVID‐19, fiscal monetary policies implemented to help counter its effects. COVID‐19 has resulted considerable slack an that was weak pre‐pandemic. While current are appropriately focused on stimulating demand supporting employment, existing challenges such as productivity, gross domestic product real wages also likely remain relevant...

Indonesia has managed the complex challenges of global economy well. The country's capital outflows were smaller in 2018 than during Taper Tantrum 2013; rupiah had regained most its lost ground by January 2019; Indonesian stock market outperformed peers; growth is forecast to remain stable; inflation low; unemployment remains below five-year average; consumer and business confidence are robust; government budget improved through a deficit cheaper borrowing costs. But significant risks...

Connected Autonomous Vehicles (CAVs) have the potential to revolutionize traffic systems by autonomously handling complex maneuvers such as freeway ramp merging. However, unpredictability of manual-driven vehicles (MDVs) poses a significant challenge. This study introduces novel decision-making approach that incorporates uncertainty MDVs’ driving styles, aiming enhance merging efficiency and safety. By framing CAV-MDV interaction an incomplete information static game, we categorize behaviors...

The rise of China is challenging the international financial architecture in a number ways. This paper highlights three that are critical importance: challenge absorbing massive Chinese savings; incorporation into cohesive global safety net; and organisation China's participation funding demand for investment projects. needs to be reformed. But what role should play? defines options open opportunities barriers it will face. We argue can work with established economic powers reforming...

Abstract Adopting a single instead of multiple targets can be an effective way to overcome the classic time‐inconsistency problem. The choice mandate depends on trade openness and credibility. Reduced‐form empirical results show as central banks become less credible, they are more likely adopt pegged exchange rate, tendency peg openness. In model with “loose commitment,” credibility falls, either inflation target or rate is adopted. A relatively closed (highly open) economy would (exchange peg).

The P eople's B ank of C hina's ( PBoC ) balance sheet expanded more dramatically than any its major international counterparts during the past decade. main contribution to this expansion was rapid accumulation central bank's foreign assets, as a result exchange market intervention. In paper, we examine possible transmission by analyzing monthly data for hina and 15 other countries over period 2000–2012. Impulse response analysis based on vector autoregression modeling suggests that PBoC's...

This paper revisits optimal monetary policy in open economies, particular, focusing on the noncooperative game under local currency pricing a two-country dynamic stochastic general equilibrium model.We first derive quadratic loss functions which makers aim to minimize.Then, we show that face extra trade-offs regarding stabilizing real marginal costs induced by deviations from law of one price pricing.As result increased number objectives, welfare gains cooperation emerge even when two...

Traditional assessments of the impact exchange rate depreciation or appreciation on trade have involved estimating elasticity volume to relative prices. Such studies relied heavily aggregated data. More recent employ bilateral data and methodologies such as ECM gravity models. This study uses a generalized model with panel analysis in assessing currency flows between China its top trading partners. The empirical evidence suggests rates (both real nominal) do not exert significant influence...

We develop a two-region Susceptible-Infected-Recovered-Macroeconomic model to evaluate the cooperative and non-cooperative cross-border travel arrangements during pandemic. In symmetric setting, Pareto optimal is arrangement that emphasizes exclusively on domestic containment. A game between social planners results in high restrictions with little benefit economics or health. With asymmetric pandemic dynamics, border closure average less welfare loss than noncooperative game, compared...

Abstract Economic activity in Australia slowed considerably 2018–19, with domestic demand growth halving and unemployment rising. Consistent the slowdown, both consumer wage inflation have remained weak. A synchronised slow‐down was observed across major economies, to some extent underpinned by on‐going US–China trade war. Central banks responded weak cutting rates. The US Federal Reserve cut its target for federal funds rate three times 2019, as did Australia. To date, record low Australian...

In this paper, we aim to understand how monetary policy is conducted in China and what the main sources of fluctuations China’s business cycle are. To end, extend a standard New Keynesian dynamic stochastic general equilibrium model with financial frictions investment-specific technology shocks. We incorporate hybrid form rule employ Bayesian estimation strategy using Chinese data. find that People’s Bank conducts by adjusting rate response inflation, output growth as well real money growth....

Abandoning an objective function with multiple targets and adopting a single mandate can be effective way for central bank to overcome the classic time-inconsistency problem. We show that choice of particular depends on economy’s level trade openness credibility bank. begin reduced form empirical results which as banks become less credible they are more likely adopt pegged exchange rate, crucially, tendency peg openness. Then in model where displays “loose commitment” we falls, either...

We develop a two-region Susceptible-Infected-Recovered-Macroeconomic model to evaluate the cooperative and non-cooperative cross-border travel arrangements during pandemic. In symmetric setting, Pareto optimal is arrangement that emphasizes exclusively on domestic containment. A game between social planners results in high restrictions with little benefit economics or health. With asymmetric pandemic dynamics, border closure average less welfare loss than game, compared cooperation. control...

Abandoning an objective function with multiple targets and adopting single mandate can be effective way for a central bank to overcome the classic time-inconsistency problem. We show that choice of particular depends on economy’s level trade openness credibility bank. begin reduced form empirical results which as banks become less credible they are more likely adopt pegged exchange rate, crucially, tendency peg openness. Then in model where displays “loose commitment” we falls, either...

Many recent theoretical papers have argued that countries can insulate themselves from volatile world capital flows by using a variable tax on foreign as an instrument of monetary policy.But at the same time many empirical only rarely do we observe these cyclical taxes used in practice.In this paper construct small open economy model where central bank engage sterilized exchange intervention.When private agents freely buy and sell bonds, intervention has no effect.But analytically prove when...