Inflation expectations, interest rates and arbitrary income transfers

Unexpected inflation, disinflation or deflation cause arbitrary income transfers between an economy's borrowers and lenders. This redistribution results from distorted real interest rates that are too high when price level changes are over-predicted and too low when they are under-predicted. This article shows that in Australia's case, inflation expectations were mostly biased upwards throughout the 1990s, according to the Melbourne Institute of Applied Economic and Social Research series and to a new derived series based on bond yields, implying that real interest rates were too high over this time. In turn, this caused substantial arbitrary income transfers from debtors to creditors, estimated to have averaged up to 3 per cent of gross domestic product over the period.

Cadence, war and security

An increased incidence of attack has been identified as a major characteristic of the new threat posed by terrorist groups such as al Qaeda. This article considers what such a change means for Western national security systems by examining bow different parts of the system change over time. It becomes evident that Western national security systems are structured on an assumption of comparatively slow state-based threats. In contrast, terrorist franchises operate at a faster pace, are more 'lightweight' and can adapt within the operational and capability cycles of Western governments. Neither network-centric warfare nor an improved assessment of the threat, called for by some, offers a panacea in this regard. Rather, it is clear that not only do Western governments need to adjust their operational and capability cycles, but that they also need a greater diversity of responses to increase overall national security resilience and offer more tools for policy-makers.

How do practitioners use conceptual modeling in practice?

Much research has been devoted over the years to investigating and advancing the techniques and tools used by analysts when they model. As opposed to what academics, software providers and their resellers promote as should be happening, the aim of this research was to determine whether practitioners still embraced conceptual modeling seriously. In addition, what are the most popular techniques and tools used for conceptual modeling? What are the major purposes for which conceptual modeling is used? The study found that the top six most frequently used modeling techniques and methods were ER diagramming, data flow diagramming, systems flowcharting, workflow modeling, UML, and structured charts. Modeling technique use was found to decrease significantly from smaller to medium-sized organizations, but then to increase significantly in larger organizations (proxying for large, complex projects). Technique use was also found to significantly follow an inverted U-shaped curve, contrary to some prior explanations. Additionally, an important contribution of this study was the identification of the factors that uniquely influence the decision of analysts to continue to use modeling, viz., communication (using diagrams) to/from stakeholders, internal knowledge (lack of) of techniques, user expectations management, understanding models' integration into the business, and tool/software deficiencies. The highest ranked purposes for which modeling was undertaken were database design and management, business process documentation, business process improvement, and software development. (c) 2005 Elsevier B.V. All rights reserved.