Asymmetry and duration dependence in Australian GDP and unemployment

The per iodic structure of business cycles suggests that significant asymmetries are present over different phases of the cycle. This paper uses markov regime-switching models with fixed and duration dependent transition probabilities to directly model expansions, contractions and durations in Australian GDP growth and unemployment growth. Evidence is found of significant asymmetry in growth rates across expansions and contractions for both series. GDP contractions exhibit duration dependence implying that as output recessions age the likelihood of switching into an expansion phase increases. Unemployment growth does not exhibit duration dependence in either phase. Evidence is also presented that non-linearities in unemployment growth are well explained by the asymmetries in the GDP growth cycle. The analysis suggests that recessions are periods of rapid and intense job destruction, that Australian unemployment tends to ratchet up in recessionary periods and, in contrast to US and UK studies, that shocks to Australian unemployment growth are more persistent in recessions than expansions. [E37 C5 C41].

The role of economic evaluation in mental health care

Objective: A consequence of the integration of psychiatry into acute and public health medicine is that psychiatrists are being asked to evaluate their services. There is pressure on mental health-care systems because it is recognized that funds should be directed where they can provide the best health outcomes, and also because there are resource constraints which limit our capacity to meet all demands for health care. This pressure can be responded to by evaluation which demonstrates the effectiveness and efficiency of psychiatric treatment. This paper seeks to remind psychiatrists of the fundamental principles of economic evaluation in the hope that these will enable psychiatrists to understand the methods used in evaluation and to work comfortably with evaluators. Method: The paper reviews the basic principles behind economic evaluation, illustrating these with reference to case studies. It describes: (i) the cost of the burden of illness and treatment, and how these costs are measured; (ii) the measurement of treatment outcomes, both as changes in health status and as resources saved; and (iii) the various types of economic evaluation, including cost-minimization, cost-effectiveness, cost-utility and cost-benefit analysis. Results: The advice in the paper provides psychiatrists with the necessary background to work closely with evaluators. A checklist of the critical questions to be addressed is provided as a guide for those undertaking economic evaluations. Conclusions: If psychiatrists are willing to learn the basic principles of economic evaluation and to apply these, they can respond to the challenges of evaluation.

Effect of removing user fees on attendance for curative and preventive primary health care services in rural South Africa

User fees are used to recover costs and discourage unnecessary attendance at primary care clinics in many developing countries. In South Africa, user fees for children aged under 6 yea rs and pregnant women were removed in 1994, and in 1997 all user fees at all primary health care clinics were abolished. The intention of these policy changes was to improve access to health services for previously disadvantaged communities. We investigated the impact of these changes on clinic attendance patterns in Hlabisa health district. Average quarterly new registrations and total attendances for preventive services (antenatal care, immunization, growth monitoring) and curative services (treatment of ailments) at a mobile primary health care unit were studied from 1992 to 1998. Regression analysis was undertaken to assess whether trends were statistically significant. There was a sustained increase in new registrations (P = 0.0001) and total attendances (P = 0.0001)for curative services, and a fall in new registrations (P = 0.01) and total attendances for immunization and growth monitoring (P = 0.0002) over the study period. The upturn in demand for curative services started at the time of the first policy change. The decreases in antenatal registrations (P = 0.07) and attendances (P = 0.09) were not statistically significant The number of new registrations for immunization and growth monitoring increased following the first policy change but declined thereafter. We found no evidence that the second policy change influenced underlying trends. The removal of user fees improved access to curative services but this may have happened at the expense of some preventive services. Governments should remain vigilant about the effects of new health policies in order to ensure that objectives are being met.

Assisting decision-making in Queensland barley production through chance constrained programming

A chance constrained programming model is developed to assist Queensland barley growers make varietal and agronomic decisions in the face of changing product demands and volatile production conditions. Unsuitable or overlooked in many risk programming applications, the chance constrained programming approach nonetheless aptly captures the single-stage decision problem faced by barley growers of whether to plant lower-yielding but potentially higher-priced malting varieties, given a particular expectation of meeting malting grade standards. Different expectations greatly affect the optimal mix of malting and feed barley activities. The analysis highlights the suitability of chance constrained programming to this specific class of farm decision problem.

Modelling socially optimal land allocations for sugar cane growing in North Queensland: a linked mathematical programming and choice modelling study

A modelling framework is developed to determine the joint economic and environmental net benefits of alternative land allocation strategies. Estimates of community preferences for preservation of natural land, derived from a choice modelling study, are used as input to a model of agricultural production in an optimisation framework. The trade-offs between agricultural production and environmental protection are analysed using the sugar industry of the Herbert River district of north Queensland as an example. Spatially-differentiated resource attributes and the opportunity costs of natural land determine the optimal tradeoffs between production and conservation for a range of sugar prices.

The aesthetic turn in international political theory

This essay explores the nature and significance of aesthetic approaches to international political theory. More specifically, it contrasts aesthetic with mimetic forms of representation. The latter, which have dominated the study of international relations, seek to represent politics as realistically and authentically as possible, aiming at capturing world politics as it really is. An aesthetic approach, by contrast, assumes that there is always a gap between a form of representation and what is represented therewith. Rather than ignoring or seeking to narrow this gap, as mimetic approaches do, aesthetic insight recognises that the inevitable difference between the represented and its representation is the very location of politics. The essay, thus, argues for the need to reclaim the political value of the aesthetic; not to replace social science or technological reason, but to broaden our abilities to comprehend and deal with the key dilemmas of world politics. The ensuing model of thought facilitates productive interactions across different faculties, including sensibility, imagination and reason, without any of them annihilating the unique position and insight of the other.

Production under uncertainty and choice under uncertainty in the emergence of generalized expected utility theory

This paper presents a personal view of the interaction between the analysis of choice under uncertainty and the analysis of production under uncertainty. Interest in the foundations of the theory of choice under uncertainty was stimulated by applications of expected utility theory such as the Sandmo model of production under uncertainty. This interest led to the development of generalized models including rank-dependent expected utility theory. In turn, the development of generalized expected utility models raised the question of whether such models could be used in the analysis of applied problems such as those involving production under uncertainty. Finally, the revival of the state-contingent approach led to the recognition of a fundamental duality between choice problems and production problems.

Review of 'The Thai Village Economy in the Past'

This charmingly old-fashioned little book was first published in Thai in 1984, and now appears in an elegant English translation. The two major intellectual influences that gave it birth are rather older, dating from the 1950s, 1960s, and early 1970s. The first developed from the intersection of the academic pre-eminence of varieties of Marxist thinking about the Third World and the struggles of anticolonial peasant-based revolutionaries and produced a high age of romanticism about the Southeast Asian village and the unfortunate victims who inhabited them. The origins of the second are more uncertain, but probably represent, paradoxically, a Thai appropriation of those Western social-science constructions of Thai cultural uniqueness which were especially popular in the 1950s and 1960s.

Background risk in generalized expected utility theory

In this paper, it is shown that, for a wide range of risk-averse generalized expected utility preferences, independent risks are complementary, contrary to the results for expected utility preferences satisfying conditions such as proper and standard risk aversion.

Patenting genetic materials' unresolved issues and promoting competition in biotechnology

This paper addresses the broader unresolved issues posed by the patenting of genetic materials that are central to dealing with the tension between the patenting and competition schemes, namely distinguishing between what has already been 'discovered' and economically useful innovations (including the thresholds for novelty and non-obviousness), the exclusion of some subject matter from patenting and the restrictions on access to genetic resources to facilitate further innovation. The possible solutions of raising the threshold patenting standards, taking advantage of international intellectual property law developments and compulsory licensing are examined as ways to ameliorate the possibly detrimental consequences of current genetic material patenting practices. (C) 2003 Elsevier B.V. All rights reserved.

Inflation targeting and macroeconomic stability in a Post Keynesian economy

This paper examines the compatibility of inflation targeting with an economy that is Post Keynesian in character. We show that in a Post Keynesian environment, policymakers can both set and achieve an inflation target without adverse consequences for the real economy, as long as an appropriate policy mix is chosen. The latitude that policymakers have in making this choice is investigated. One of our key results is that orthodox policy regimes do not provide appropriate policy mixes. Indeed, the more orthodox the policy regime becomes, the less viable is inflation targeting in a Post Keynesian economy.

Real exchange rate and elasticity of labour supply in a balance-of-payments-constrained macrodynamics

A macrodynamic model is proposed in which the real exchange rate and the elasticity of labour supply interact defining different trajectories of growth and income distribution in a developing economy. Growth depends on imports of capital goods which are paid with exports (there are no capital flows) and hence is constrained by equilibrium in current account. The role of the elasticity of labour supply is to prevent the real exchange rate from appreciating as the economy grows, thereby sustaining international competitiveness. The model allows for endogenous technological change and considers the impact of migration from the subsistence to the modern sector on the cumulative (Kaldor-Verdoorn) process of learning.

Stability property of matchings is a natural solution concept in coalitional market games

Stability of matchings was proved to be a new cooperative equilibrium concept in Sotomayor (Dynamics and equilibrium: essays in honor to D. Gale, 1992). That paper introduces the innovation of treating as multi-dimensional the payoff of a player with a quota greater than one. This is done for the many-to-many matching model with additively separable utilities, for which the stability concept is defined. It is then proved, via linear programming, that the set of stable outcomes is nonempty and it may be strictly bigger than the set of dual solutions and strictly smaller than the core. The present paper defines a general concept of stability and shows that this concept is a natural solution concept, stronger than the core concept, for a much more general coalitional game than a matching game. Instead of mutual agreements inside partnerships, the players are allowed to make collective agreements inside coalitions of any size and to distribute his labor among them. A collective agreement determines the level of labor at which the coalition operates and the division, among its members, of the income generated by the coalition. An allocation specifies a set of collective agreements for each player.