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.

A call to arms at the end of history: a discourse-historical analysis of George W. Bush's declaration of war on terror

In this article we take a discourse-historical approach to illustrate the significance of George W Bush's (2001) declaration of a 'war on terror'. We present four exemplary 'call to arms' speeches by Pope Urban 11 (1095), Queen Elizabeth I (1588), Adolf Hitler (1938) and George W Bush (2001) to exemplify the structure, function, and historical significance of such texts in western societies over the last millennium. We identify four generic features that have endured in such texts throughout this period: (i) an appeal to a legitimate power source that is external to the orator, and which is presented as inherently good; (ii) an appeal to the historical importance of the culture in which the discourse is situated; (iii) the construction of a thoroughly evil Other; and (iv) an appeal for unification behind the legitimating external power source. We argue further that such texts typically appear in historical contexts characterized by deep crises in political legitimacy.