Jeffrey Carmichael

Investment and Australian Economic Growth

Investment is at the very heart of economic growth. In the short run, fluctuations in investment are a dominant source of fluctuations in growth. In the longer run, investment determines the capital stock and this, probably more than any other factor, determines the trends of growth in economic activity and employment.

Wage inflation with tradeable and non-tradeable goods

Abstract This paper constructs separate price series for tradeable and non-tradeable goods in Australia, and tests the validity of their aggregation in a conventional expectations-augmented Phillips curve model.

Utility Compensation in the Pure Theory of International Trade: An Empirically-Oriented Generalisation

One of the cornerstones of the modern welfare approach to international trade theory is the compensation principle due to Samuelson. The difficulty with the compensation principle is that it pays scant attention to the way in which the equilibrium of the system changes when compensation is actually paid. This paper is concerned with the efficient location of the set of the utility-compensated equilibria; that is, the set of equilibria that satisfies the condition that compensation be paid such that no-one is worse off following a particular event or policy change. Using the gains from trade as an example, Dixon’s theory of joint maximisation is shown to be an ideal tool, in an empirically-implementable form, for problems of this type.