The productivity-inflation nexus: The case of the Australian mining sector

This paper examines the causal links between productivity growth and two price series given by domestic inflation and the price of mineral products in Australia's mining sector for the period 1968/1969 to 1997/1998. The study also uses a stochastic translog cost frontier to generate improved estimates of total factor productivity (TFP) growth. The results indicate negative unidirectional causality running from both price series to mining productivity growth. Regression analysis further shows that domestic inflation has a small but adverse effect on mining productivity growth, thus providing some empirical support for Australia's 'inflation first' monetary policy, at least with respect to the mining sector. Inflation in mineral price, on the other hand, has a greater negative effect on mining productivity growth via mineral export growth.

How cost efficient are Australia's mining industries?

This paper uses a stochastic translog cost frontier model and a panel data of five key mining industries in Australia over 1968-1969 to 1994-1995 to investigate the sources of output growth and the effects of cost inefficiency on total factor productivity (TFP) growth. The results indicate that mining output growth was largely input-driven rather than productivity-driven. Although there were some gains from technological progress and economics of scale in production, cost inefficiency which barely exceeded 1.1% since the mid-1970s in the mining industries was the main factor causing low TFP growth. (C) 2002 Elsevier Science B.V. All rights reserved.

Diversification economies and specialisation efficiencies in a mixed food and coffee smallholder farming system in Papua New Guinea

Smallholder farming systems in Papua New Guinea are characterised by an integrated set of cash cropping and subsistence food cropping activities. In the Highlands provinces, the subsistence food crop sub-system is dominated by sweet potato production. Coffee dominates the cash cropping sub-system, but a limited number of food crops are also grown for cash sale. The dynamics between sub-systems can influence the scope for complementarity between, and technical efficiency of, their operations, especially in light of the seasonality of demand for household labour and management inputs within the farming system. A crucial element of these dynamic processes is diversification into commercial agricultural production, which can influence factor productivity and the efficiency of crop production where smallholders maintain a strong production base in subsistence foods. In this study we use survey data from households engaged in coffee and food crop production in the Benabena district of Eastern Highlands Province to derive technical efficiency indices for each household over two years. A stochastic input distance function approach is used to establish whether diversification economies exist and whether specialisation in coffee, subsistence food or cash food production significantly influences technical efficiency on the sampled smallholdings. Diversification economics are weakly evident between subsistence food production and both coffee and cash food production, but diseconomies of diversification are discerned between coffee and cash food production. A number of factors are tested for their effects on technical efficiency. Significant technical efficiency gains are made from diversification among broad cropping enterprises.