Inflation expectations, interest rates and arbitrary income transfers

Unexpected inflation, disinflation or deflation cause arbitrary income transfers between an economy's borrowers and lenders. This redistribution results from distorted real interest rates that are too high when price level changes are over-predicted and too low when they are under-predicted. This article shows that in Australia's case, inflation expectations were mostly biased upwards throughout the 1990s, according to the Melbourne Institute of Applied Economic and Social Research series and to a new derived series based on bond yields, implying that real interest rates were too high over this time. In turn, this caused substantial arbitrary income transfers from debtors to creditors, estimated to have averaged up to 3 per cent of gross domestic product over the period.

Are there non-linearities in short-term interest rates?

The present paper investigates the characteristics of short-term interest rates in several countries. We examine the importance of nonlinearities in the mean reversion and volatility of short-term interest rates. We examine various models that allow the conditional mean (drift) and conditional variance (diffusion) to be functions of the current short rate.We find that different markets require different models. In particular, we find evidence of nonlinear mean reversion in some of the countries that we examine, linear mean reversion in others and no mean reversion in some countries. For all countries we examine, there is strong evidence of the need for the volatility of interest rate changes to be highly sensitive to the level of the short-term interest rate. Out-of-sample forecasting performance of one-factor short rate models is poor, stemming from the inability of the models to accommodate jumps and discontinuities in the time series data.

On the robustness of short-term interest rate models

This paper investigates the robustness of a range of short–term interest rate models. We examine the robustness of these models over different data sets, time periods, sampling frequencies, and estimation techniques. We examine a range of popular one–factor models that allow the conditional mean (drift) and conditional variance (diffusion) to be functions of the current short rate. We find that parameter estimates are highly sensitive to all of these factors in the eight countries that we examine. Since parameter estimates are not robust, these models should be used with caution in practice.

On the threshold of forgetting: Amnesiac identities and the Brazilian capital

Centuries after Locke asserted the importance of memory to identity, Freudian psychology argued that what was forgotten was of equal importance as to what was remembered. The closing decades of the nineteenth century saw a rising interest in the nature of forgetting, resulting in a reassessment and newfound distrust of the long revered faculty of memory. The relationship between memory and identity was inverted, seeing forgetting also become a means for forging identity. This newfound distrust of memory manifested in the writings of Nietzsche who in 1874 called for society to learn to feel unhistorically and distance itself from the past - in what was essentially tantamount to a cultural forgetting. Following the Nietzschean call, the architecture of Modernism was also compelled by the need to 'overcome' the limits imposed by history. This paper examines notions of identity through the shifting boundaries of remembering and forgetting, with particular reference to the construction of Brazilian identity through the ‘repression’ of history and memory in the design of the Brazilian capital. Designed as a forward-looking modernist utopia, transcending the limits imposed by the country's colonial heritage, the design for Brasilia exploited the anti-historicist agenda of modernism to emancipate the country from cultural and political associations with the Portuguese Empire. This paper examines the relationship between place, memory and forgetting through a discussion of the design for Brasilia.

What are the economic prospects of developing aquaculture in Queensland to supply the low price white fillet market? Lessons from the US channel catfish industry

The farming of channel catfish (Ictalurus punctatus) is the largest (by volume and value) and most successful (in terms of market impact) aquaculture industry in the United States of America. Farmed channel catfish is the most consumed (in terms of volume per capita) fish fillet in the U.S. market. Within Australia, it has long been suggested by researchers and industry that silver perch (Bidyanus bidyanus) and possibly other endemic teraponid species possess similar biological attributes for aquaculture as channel catfish and may have the potential to generate a similar industry. The current teraponid industry in Australia, however, shows very little resemblance to the catfish industry, either in production style or market philosophy. A well established budget framework from the literature on U.S. channel catfish farming has been adapted for cost and climate conditions of the Burdekin region, Queensland, Australia. Breakeven prices for the hypothetical teraponid farms were found to be up to 50% higher than those published for catfish farms however were much lower than those reported for silver perch production in Australia using current, endemic styles of production. The breakeven prices for the hypothetical teraponid farms were most sensitive (in order of significance) to feed prices, production rates, interest rates, fingerling prices and electricity prices. At equivalent feed costs the costs of production between the hypothetical catfish farms in the Mississippi, U.S. and the hypothetical teraponid farms in the Burdekin, Australia were remarkably similar. The cost of feeds suitable for teraponid production in Australia are currently around double that of catfish feeds in the U.S. Issues currently hindering the development of a large scale teraponid industry in Australia are discussed.

The current account, fiscal policy, and medium-run income determination

This article presents a new framework for analyzing the simultaneous determination of current account imbalances and the path of national income. Using standard macroeconomic behavioral relationships, it first examines how and why current account deficits matter by investigating links between domestic consumption, government spending, output, saving, investment, interest rates, and capital flows. Central to the model is the distinction between aggregate output and expenditure that enables dissection of the effects of discretionary fiscal change on the current account and national income. The framework yields results relevant to the twin deficits hypothesis that are contrary to those of standard models.

Non-Equilibrium Reaction Rates in the Macroscopic Chemistry Method for DSMC Calculations

The Direct Simulation Monte Carlo (DSMC) method is used to simulate the flow of rarefied gases. In the Macroscopic Chemistry Method (MCM) for DSMC, chemical reaction rates calculated from local macroscopic flow properties are enforced in each cell. Unlike the standard total collision energy (TCE) chemistry model for DSMC, the new method is not restricted to an Arrhenius form of the reaction rate coefficient, nor is it restricted to a collision cross-section which yields a simple power-law viscosity. For reaction rates of interest in aerospace applications, chemically reacting collisions are generally infrequent events and, as such, local equilibrium conditions are established before a significant number of chemical reactions occur. Hence, the reaction rates which have been used in MCM have been calculated from the reaction rate data which are expected to be correct only for conditions of thermal equilibrium. Here we consider artificially high reaction rates so that the fraction of reacting collisions is not small and propose a simple method of estimating the rates of chemical reactions which can be used in the Macroscopic Chemistry Method in both equilibrium and non-equilibrium conditions. Two tests are presented: (1) The dissociation rates under conditions of thermal non-equilibrium are determined from a zero-dimensional Monte-Carlo sampling procedure which simulates ‘intra-modal’ non-equilibrium; that is, equilibrium distributions in each of the translational, rotational and vibrational modes but with different temperatures for each mode; (2) The 2-D hypersonic flow of molecular oxygen over a vertical plate at Mach 30 is calculated. In both cases the new method produces results in close agreement with those given by the standard TCE model in the same highly nonequilibrium conditions. We conclude that the general method of estimating the non-equilibrium reaction rate is a simple means by which information contained within non-equilibrium distribution functions predicted by the DSMC method can be included in the Macroscopic Chemistry Method.

Increased rates of ENT surgery among young children: Have clinical guidelines made a difference?

Objectives: To examine the association between introduction of paediatric ear, nose and throat (ENT) surgery guidelines and population procedure rates. To determine changes in children's risk of undergoing ENT surgery. Methods: Trend analysis of incidence of myringotomy, tonsillectomy and adenoidectomy among New South Wales (NSW) children aged 0-14 between 1981 and mid 1999. Poisson regression models were used to estimate annual rates of change pre and postguidelines introduction and age/gender specific rates, and lifetable methods to determine risk of undergoing an ENT procedure by age 15. Results: ENT surgery rates increased by 21% over the study period. Children's risk of surgery increased from 17.9% in 1981 to 20.2% in 1998/99. Guideline introduction was associated with moderate short-term decreases in rates. For tonsillectomy, rates decreased between 1981 and 1983, but then rose continually until the introduction of myringotomy guidelines in 1993, when they fell, only to recommence rising until the end of the study period. For myringotomy, rates rose annually from 1981 to 1992/93 and fell in the 3 years following guideline introduction, after which they rose again. Increases were almost exclusively restricted to children aged 0-4 and correspond with increased use of formal childcare. The prevalence of myringotomy by the age of 5 years rose from 5.6% of children born in 1988/89 to 6.4% of those born in 1994/95, and the prevalence of tonsillectomy from 2.4% to 2.7%. Conclusions: The risk of young Australian children undergoing ENT surgery increased significantly over the last two decades despite the introduction of guidelines and no evidence of an increase in otitis media, one condition prompting surgery. Surgery increased most among the very young. We hypothesize this is related to increasing use of childcare.

Long-term trends in sunshine duration and its association with schizophrenia birth rates and age at first registration - data from Australia and the Netherlands

Back ground. Based on the well-described excess of schizophrenia births in winter and spring, we hypothesised that individuals with schizophrenia (a) would be more likely to be born during periods of decreased perinatal sunshine, and (b) those born during periods of less sunshine would have an earlier age of first registration. Methods. We undertook an ecological analysis of long-term trends in perinatal sunshine duration and schizophrenia birth rates based on two mental health registers (Queensland. Australia n = 6630; The Netherlands n = 24, 474). For each of the 480 months between 1931 and 1970, the agreement between slopes of the trends in psychosis and long-term sunshine duration series were assessed. Age at first registration was assessed by quartiles of long-term trends in perinatal sunshine duration, Males and females were assessed separately. Results. Both the Dutch and Australian data showed a statistically significant association between falling long-term trends in sunshine duration around the time of birth and rising schizophrenia birth rates for males only. In both the Dutch and Australian data there were significant associations between earlier age of first registration and reduced long-term trends in sunshine duration around the time of birth for both males and females, Conclusions. A measure of long-term trends in perinatal sunshine duration was associated with two epidemiological features of schizophrenia in two separate data sets. Exposures related to sunshine duration warrant further consideration in schizophrenia research. (C) 2002 Elsevier Science B.V. All rights reserved.

Improving precision and reducing bias in biological surveys: estimating false-negative error rates

The use of presence/absence data in wildlife management and biological surveys is widespread. There is a growing interest in quantifying the sources of error associated with these data. We show that false-negative errors (failure to record a species when in fact it is present) can have a significant impact on statistical estimation of habitat models using simulated data. Then we introduce an extension of logistic modeling, the zero-inflated binomial (ZIB) model that permits the estimation of the rate of false-negative errors and the correction of estimates of the probability of occurrence for false-negative errors by using repeated. visits to the same site. Our simulations show that even relatively low rates of false negatives bias statistical estimates of habitat effects. The method with three repeated visits eliminates the bias, but estimates are relatively imprecise. Six repeated visits improve precision of estimates to levels comparable to that achieved with conventional statistics in the absence of false-negative errors In general, when error rates are less than or equal to50% greater efficiency is gained by adding more sites, whereas when error rates are >50% it is better to increase the number of repeated visits. We highlight the flexibility of the method with three case studies, clearly demonstrating the effect of false-negative errors for a range of commonly used survey methods.

British drinking: a suitable case for treatment?

The rising consumption of alcohol per capita in Britain over the past 20 years has produced large increases in the prevalence of alcoholic cirrhosis, alcohol related violence, and heavy alcohol use, costing the British economy around £30bn ($55bn; {euro}44bn) a year.1 About 7.5% of men and 2.1% of women in Britain are dependent on alcohol, among the highest rates in the European Union.2 Two papers in this issue show that two relatively brief psychosocial interventions—motivational enhancement treatment and social network therapy—are effective and cost effective in treating alcohol dependence, when delivered under routine clinical conditions in the NHS.3 4 The UK government could realise its stated aim of increasing access to effective treatments for alcohol dependence by investing in these interventions. Britain also urgently needs to reduce the high rates of high risk drinking that produce dependence, health problems, and public disorder. Epidemiologists see the key drivers of rising consumption . . . [Full text of this article]