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.

The oil shock of 2005

During the course of 2005, the price of crude oil reached unprecedented high levels, at least in nominal terms. Australian motorists have become used to paying more than a dollar a litre for petrol. Given the past volatility in oil prices, often described in terms of a series of oil ‘shocks’ (the large price increases in 1973, 1979 and 1999), several questions arise. First, will current high prices persist, or will prices decline substantially as occurred after previous oil shocks? Second, is the current shortage of oil a temporary phenomenon, caused by inadequate investment in oil exploration, drilling and refining capacity, or is it a signal that the supply of oil available to the world has peaked? Third, will high oil prices lead to broader economic disruption, as is commonly supposed to have happened after previous shocks? Fourth, how painful will an adjustment to lower use of oil be? Finally, how does all this relate to our efforts to deal with the problem of climate change? This article is an effort to answer some of these questions in the light of the knowledge available to us.

The productivity effects of cattle tick (Boophilus microplus) infestation on cattle, with particular reference to Bos indicus cattle and their crosses

In response to uncertainty among cattle producers in Australia regarding the need to treat Bos indices and B. indicus crossbreeds, the scientific literature relating to the productivity effects of Boophilus microplus on cattle of all breeds was reviewed. Estimates of the mean effect of each engorging tick (damage coefficient, d) were made from a simple analysis of the reported data. On average, each engorging female tick is responsible for the loss of 1.37 +/- 0.25 g bodyweight in B. taunts cattle. The comparable value for B. taurus x B. indicus cattle is 1.18 +/- 0.21 g/engorging tick. These values were not statistically significantly different, indicating that if a threshold approach to tick control were taken, then the threshold number of standard ticks would be the same regardless of cattle genotype. No studies provided useable estimates of the effect of tick infestation on pure B. indices cattle. An economic threshold for treatment, below which acaricide application is not beneficial, can be predicted, using known values for the cost of acaricide application and the price of beef. However, the application of a threshold approach to control has not been embraced by government advisers and runs contrary to the accepted principals of strategic control programs. (C) 2006 Elsevier B.V. All rights reserved.

Short-term electricity price forecasting using wavelet and SVM techniques

In deregulated electricity market, modeling and forecasting the spot price present a number of challenges. By applying wavelet and support vector machine techniques, a new time series model for short term electricity price forecasting has been developed in this paper. The model employs both historical price and other important information, such as load capacity and weather (temperature), to forecast the price of one or more time steps ahead. The developed model has been evaluated with the actual data from Australian National Electricity Market. The simulation results demonstrated that the forecast model is capable of forecasting the electricity price with a reasonable forecasting accuracy.

Risk exposures and international diversification: Evidence from iShares

We examine the newly developed international diversification instruments–iShares traded on the American Stock Exchange. Given the fact that iShares can be created and redeemed at will, the daily price of an iShare is expected to be equal to the daily portfolio value of the underlying assets in the home-country market. Therefore, theoretically, iShare pricing should be influenced by the risk from the iShare's home-country market and not the risk from the US market, per se. We evaluate the risk exposure of iShare prices to the US market (non-fundamental effect) as well as the home-country market (the fundamental effect). We find that most iShare returns are significantly influenced by and sensitive to the US market risk. Moreover, the US market appears to be the key permanent driving factor and the home-country market is a pronounced transitory driving force for iShare prices. These findings indicate the presence of limits of international arbitrage for iShares. As a result, the international diversification benefits of iShares become questionable.

Matching poultry production with available feed resources: issues and constraints

Corn and soyabeans may not be available in many countries particularly those which do not have sufficient foreign currency or the capacity to grow them. This paper outlines strategies that may be important under these circumstances. Alternative feedstuffs and various feeding systems may be used to support poultry production. Alternative ingredients such as rice bran, pearl millet, cottonseed meal and grain legumes are discussed. Evidence is presented showing that amino acid requirements of layers and broilers may be too generous particularly in countries where climate, management and disease can impose production constraints. The ability of finishing broilers to perform well on very low-energy diets allows the inclusion of alternative feeds and by-products into formulations. Very low protein diets based on cereals and free amino acids can be used for layers without loss of performance. Self-selection of feedstuffs may be an important strategy in reducing feed costs of broilers and layers. The concept of matching production with available feed resources may compromise broiler growth and egg production, but in many countries this may be the most economical choice. Countries in the humid tropics usually have reduced poultry performance. The effects of high temperature and humidity are difficult to overcome. The vexed questions of the escalation in the price of fossil fuel and the outbreak of avian influenza, both seemingly without a solution, are clouds hanging over an otherwise buoyant industry.

Documenting the heroin shortage in New South Wales

Australian heroin markets have recently undergone dramatic change, sparking debate about the nature of such markets. This study aimed to determine the onset, peak and decline of the heroin shortage in New South Wales (NSW), using the most appropriate available methods to detect market level changes. The parameters of the heroin shortage were determined by reviewing: reports of heroin users about availability and price (derived from the existing literature and the Illicit Drug Reporting System); qualitative interviews with injecting drug users, and health and law enforcement professionals working in the illicit drug field; and examining data on heroin seizures over the past decade. There was a marked reduction in heroin supply in NSW in early 2001. An increase in the price of heroin occurred in 2001, whereas it had decreased steadily since 1996. A reduction in purity also occurred, as reported by drug users and heroin seizures. The peak period of the shortage appears to have been January to April 2001. The market appears to have stabilised since that time, although it has not returned to pre- 2001 levels: heroin prices have decreased in NSW for street grams, but not to former levels, and the price of `caps' (street deals) remain elevated. Heroin purity in NSW has remained low, with perhaps a 10% increase above the lowest recorded levels. These data support the notion that the heroin market in NSW underwent significant changes, which appear to have involved a lasting shift in the nature of the market.

Technical and economic factors in applying the enhanced coalbed methane recovery process

Geological sequestration of CO2 is a technically feasible and potentially economic option for significantly and safely reducing greenhouse gas emissions, with CO2 injection already practiced in Canada and the USA to enhance crude oil production. The Enhanced Coalbed Methane (ECBM) process is seen as the next most economical sequestration options. The authors estimate an incremental methane recovery factor from 20% to 50%, depending on coal rank and seam depth. Others have estimated the potential to increase worldwide CBM production, utilising ECBM, by 18 Trillion cubic meters, while simultaneously sequestering 345 Giga tonnes of CO2. This paper presents technical and economic factors to consider for developing a commercial ECBM project. Technical factors include: geostructural and hydrogeological issues, geochemical reactions, stressed and competitive sorption, counter-diffusion, effective and relative 4-D coal permeability and methane recovery levels. Key economic factors are injectant acquisition price, sale price of methane and the level of carbon credits.