Asset Price Instability and Policy Responses: The Legacy of Liberalization

The problem of asset price bubbles, and more generally of instability in the financial system, has been a matter of concern since the 1980s but has only recently moved to the center of the macroeconomic policy debate. The main concern with bubbles arises when they burst, imposing losses on investors holding the bubble assets and potentially on the financial institutions that have extended credit to them. Asset price volatility is an inevitable consequence of financial market liberalization and, in extreme cases, generates asset price bubbles, the bursting of which can impose substantial economic and social costs. Policy responses within the existing liberalized financial system face daunting levels of uncertainty and risk. Given the pattern of increasing asset market volatility over recent decades and the policy issues highlighted in this paper, the future looks uncertain. Another significant cycle of asset price movements, especially in one of the major economies, could see a fundamental revision of thinking about the costs and benefits of liberalized financial systems.

Optimal strategies in political elections

In the Majoritarian Parliamentary System, the government has a constitutional right to call an early election. This right provides the government a control to achieve its objective to remain in power for as long as possible. We model the early election problem mathematically using opinion polls data as a stochastic process to proxy the government's probability of re-election. These data measure the difference in popularity between the government and the opposition. We fit a mean reverting Stochastic Differential Equation to describe the behaviour of the process and consider the possibility for the government to use other control tools, which are termed 'boosts' to induce shocks to the opinion polls by making timely policy announcements or economic actions. These actions improve the government's popularity and have some impact upon the early-election exercise boundary. © Austral. Mathematical Soc. 2005.

Stress in veterinary science students: A study at the University of Queensland

This paper reports on the results of a survey of selected University of Queensland (UQ) veterinary students aimed at elucidating factors causing stress during the five undergraduate years of the program. Students from each of the five years were asked to form six- or seven-member focus groups. Each focus group was then interviewed and their opinions sought on causes of ongoing stress and the ranking of those causes into predetermined categories. They were also asked to give their opinions on counseling services available within the university and what, if any, services they would like to see in place to help students with stress-related problems. Students in the first, third, and fourth years of the program rated academic issues as the most likely causes of ongoing stress, while students in the second and fifth years of the program ranked lifestyle and financial issues as more likely to cause ongoing stress. in most cases, students coped well with these causes of stress and tended not to use counseling services available to all UQ students. When faced with stressful issues, students looked to their classmates or family members for help and not to university counseling services. Students were also happy to approach staff members in the Veterinary School when faced with a problem. The authors nevertheless conclude that mechanisms set in place at the undergraduate level to help veterinary students cope with stress should particularly benefit those students when they become new graduates and are faced with the stresses of veterinary practice.

A comparison of responses to group learning between first-year Asian and first-year Australian veterinary science students

Introduction - Group learning has been used to enhance deep (long-term) learning and promote life skills, such as decision making, communication, and interpersonal skills. However, with increasing multiculturalism in higher education, there is little information available as to the acceptance of this form of learning by Asian students or as to its value to them. Methodology - Group-learning projects, incorporating a seminar presentation, were used in first-year veterinary anatomical science classes over two consecutive years (2003 and 2004) at the School of Veterinary Science, University of Queensland. Responses of Australian and Asian students to survey forms evaluating the learning experience were analyzed and compared. Results - All students responded positively to the group learning, indicating that it was a useful learning experience and a great method for meeting colleagues. There were no significant differences between Asian and Australian students in overall responses to the survey evaluating the learning experience, except where Asian students responded significantly higher than Australian students in identifying specific skills that needed improving. Conclusions - Group learning can be successfully used in multicultural teaching to enhance deep learning. This form of learning helps to remove cultural barriers and establish a platform for continued successful group learning throughout the program.

Science-policy in environmental and health risk assessment: if we cannot do without, can we do better?

How can empirical evidence of adverse effects from exposure to noxious agents, which is often incomplete and uncertain, be used most appropriately to protect human health? We examine several important questions on the best uses of empirical evidence in regulatory risk management decision-making raised by the US Environmental Protection Agency (EPA)'s science-policy concerning uncertainty and variability in human health risk assessment. In our view, the US EPA (and other agencies that have adopted similar views of risk management) can often improve decision-making by decreasing reliance on default values and assumptions, particularly when causation is uncertain. This can be achieved by more fully exploiting decision-theoretic methods and criteria that explicitly account for uncertain, possibly conflicting scientific beliefs and that can be fully studied by advocates and adversaries of a policy choice, in administrative decision-making involving risk assessment. The substitution of decision-theoretic frameworks for default assumption-driven policies also allows stakeholder attitudes toward risk to be incorporated into policy debates, so that the public and risk managers can more explicitly identify the roles of risk-aversion or other attitudes toward risk and uncertainty in policy recommendations. Decision theory provides a sound scientific way explicitly to account for new knowledge and its effects on eventual policy choices. Although these improvements can complicate regulatory analyses, simplifying default assumptions can create substantial costs to society and can prematurely cut off consideration of new scientific insights (e.g., possible beneficial health effects from exposure to sufficiently low 'hormetic' doses of some agents). In many cases, the administrative burden of applying decision-analytic methods is likely to be more than offset by improved effectiveness of regulations in achieving desired goals. Because many foreign jurisdictions adopt US EPA reasoning and methods of risk analysis, it may be especially valuable to incorporate decision-theoretic principles that transcend local differences among jurisdictions.