The transmission process of monetary policy is a longstanding macroeconomic issue. The lending view is that a monetary tightening affects aggregate demand by shifting the supply schedule of bank loans left. The contraction of bank loans does not necessarily mean a shift of the supply schedule. Therefore, testing the lending view requires the identification of the shifts of the demand and supply schedules in the bank loan market. This paper employs an original approach, finding that the lending channel is not dominant in Australia. The paper also examines features of Australian banks’ behaviour which make the lending channel less dominant.

This paper formalises an individual's decision about suicide within a framework of lifetime utility maximisation models. This is in line with the literature on economic modelling of suicide. The novelty of the paper is to take into account income uncertainty. Income uncertainty reduces a risk-averse individual's expected utility, making them more likely to commit suicide. On the other hand, income uncertainty creates a value to postponing suicide even when their income gets sufficiently low. This is because income uncertainty means that if things go well, they will get higher income in the future. Thus, income uncertainty has two opposite effects on suicidal behaviour. The main objective of this paper is to construct an economic model of suicide for investigating net impacts of income uncertainty on suicidal behaviour. For this purpose, it is assumed that the wage evolves according to a stochastic process. Then, the threshold wage, below which an individual commits suicide, is derived as a function of the parameters of the stochastic process assumed for the wage evolution. Impacts of changes in these parameters on the threshold wage are calculated. With the result, the paper shows how income uncertainty affects suicidal behaviour. I . I n t r o d u c t i o nSuicide is a major public health problem in Australia. While youth suicide tends to draw much attention, disaggregated data by gender and age reveal that suicide is not primarily an issue among young Australians. Figure 1 illustrates that male suicides consistently outnumbered female ones by a ratio of four to one. Figure 2 shows that males aged 25 to 34 and those aged 35 to 44 had the highest and the second highest age-specific suicide rates in 2004 among all age groups, respectively. More specifically, men aged 25 to 44 made up 36.9 per cent of the total deaths from suicide in 2004. As such, middle-aged males are at high risk of suicide in Australia. This paper bears the middle-aged male suicide in mind.What prompts middle-aged men to commit suicide? It is generally agreed that the unemployment rate among suicides is higher than for the population. The empirical work on economics of suicide also finds that male suicide rates are more responsive to changes in macroeconomic conditions than female ones in a variety of countries. These findings from aggregate data imply that economic difficulties are important elements for understanding middle-aged male suicides. As middleaged men traditionally see themselves as breadwinners in western countries, they may mentally

The credit view is that a monetary tightening affects the real economy by shifting the supply schedule of bank credit left. While bank credit typically contracts following a monetary tightening, the financial contraction does not necessarily mean a shift of the supply schedule. Testing the credit view requires the identification of the shifts of the demand and supply schedules of credit. Using an original approach, this study shows that the credit view is supported for Japan. The credit view is, however, composed of two different views, namely the lending view and the balance-sheet view. While the balance-sheet view implies that the cutback of lending has no impact on the real economy, the lending view implies independent impacts of the cutback. Given the acceptance of the credit view, this study further attempts to test the balance-sheet view against the lending view.

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A longstanding macroeconomic issue is how monetary policy affects the real economy. There are economists placing an emphasis on the role of bank lending in monetary transmission. Their view, called the credit view, is that a monetary tightening shifts the supply schedule of bank loans left, thereby forcing bank-dependent borrowers to cut back on expenditures. In the literature, the credit view is typically studied in a closed-economy context. In reality, however, banks make international loans through their overseas branches and subsidiaries. This suggests that the credit view should be studied in an open-economy context. This paper proposes the international credit view: a monetary-policy shock originated in one country propagates to another through banks' reallocation of funds between the two countries. For testing the hypothesis, Australia and New Zealand provide an excellent case to study. This is because Australian-owned banks dominate the banking market in New Zealand. This paper aims to test the international credit view within a framework of vector auto-regression models. A significant and robust finding is that the supply schedule of loans shifts left in New Zealand after a monetary tightening in Australia. Copyright 2008 The Author. Journal compilation 2008 Blackwell Publishing Ltd/University of Adelaide and Flinders University.