The Macroeconomic Effects of Fiscal Policy in a Small Open Economy under a Flexible Exchange Rate Regime

This licentiate's thesis analyzes the macroeconomic effects of fiscal policy in a small open economy under a flexible exchange rate regime, assuming that the government spends exclusively on domestically produced goods. The motivation for this research comes from the observation that the literature on the new open economy macroeconomics (NOEM) has focused almost exclusively on two-country global models and the analyses of the effects of fiscal policy on small economies are almost completely ignored. This thesis aims at filling in the gap in the NOEM literature and illustrates how the macroeconomic effects of fiscal policy in a small open economy depend on the specification of preferences. The research method is to present two theoretical model that are extensions to the model contained in the Appendix to Obstfeld and Rogoff (1995). The first model analyzes the macroeconomic effects of fiscal policy, making use of a model that exploits the idea of modelling private and government consumption as substitutes in private utility. The model offers intuitive predictions on how the effects of fiscal policy depend on the marginal rate of substitution between private and government consumption. The findings illustrate that the higher the substitutability between private and government consumption, (i) the bigger is the crowding out effect on private consumption (ii) and the smaller is the positive effect on output. The welfare analysis shows that the less fiscal policy decreases welfare the higher is the marginal rate of substitution between private and government consumption. The second model of this thesis studies how the macroeconomic effects of fiscal policy depend on the elasticity of substitution between traded and nontraded goods. This model reveals that this elasticity a key variable to explain the exchange rate, current account and output response to a permanent rise in government spending. Finally, the model demonstrates that temporary changes in government spending are an effective stabilization tool when used wisely and timely in response to undesired fluctuations in output. Undesired fluctuations in output can be perfectly offset by an opposite change in government spending without causing any side-effects.

Complimentary collaborations: Teachers and researchers co-developing best practices in art education

Australia is currently experiencing a huge cultural shift as it moves from a State-based curriculum, to a national education system. The Australian State-based bodies that currently manage teacher registration, teacher education course accreditation, curriculum frameworks and syllabi are often complex organisations that hold conflicting ideologies about education and teaching. The development of a centralised system, complete with a single accreditation body and a national curriculum can be seen as a reaction to this complexity. At the time of writing, the Australian Curriculum is being rolled out in staggered phases across the states and territories of Australia. Phase one has been implemented, introducing English, Mathematics, History and Science. Subsequent phases (Humanities and Social Sciences, the Arts, Technologies, Health and Physical Education, Languages, and year 9-10 work studies) are intended to follow. Forcing an educational shift of this magnitude is no simple task; not least because the States and Territories have and continue to demonstrate varying levels of resistance to winding down their own curricula in favour of new content with its unfamiliar expectations and organisations. The full implementation process is currently far from over, and far from being fully resolved. The Federal Government has initiated a number of strategies to progress the implementation, such as the development of the Australian Institute for Teaching and School Leadership (AITSL) to aid professional educators to implement the new curriculum. AITSL worked with professional and peak specialist bodies to develop Illustrations of Practice (hereafter IoP) for teachers to access and utilise. This paper tells of the building of one IoP, where a graduate teacher and a university lecturer collaborated to construct ideas and strategies to deliver visual arts lessons to early childhood students in a low Socio- Economic Status [SES] regional setting and discusses the experience in terms of its potential for professional learning in art education.