Labour Market Dynamics in Australia: What Drives Unemployment?

Abstract

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Investment Crowding‐Out and Labor Market Effects of Financialization in the US

“…Our estimation technique is the ARDL, or bounds testing approach to cointegration analysis, developed by Pesaran and Shin (1999) and Pesaran et al (2001). It is used in previous CRT studies (e.g., Karanassou et al, 2008;Karanassou and Sala, 2010a) because it yields consistent estimates both in the short and in the long run, and can be reliably used in small sample for hypothesis testing irrespective of whether the regressors are I(1) or I(0).…”

“…Stockhammer (2004a, b) uses a time series analysis for five countries controlling for several labor market variables, and finds strong effects of capital accumulation on unemployment. Using the Chain Reaction methodology, Karanassou et al (2008) and Karanassou and Sala (2010a) find significant effects of capital accumulation on unemployment in the Nordic countries and Australia respectively. Empirical evidence is, therefore, contrary to the 'unemployment invariance hypothesis' in any of its forms.…”

Implications of the 2009 Age Pension Reform in Australia: A Dynamic General Equilibrium Analysis*

“…We also target the negative ratio of net foreign assets to capital 6 The calibrated value of 1.09 for the elasticity of substitution in production is higher than the usual finding of values of <1 for this parameter. For example, Dixon et al (2005) estimate the elasticity of substitution to be 0.315, whereas Karanassou and Sala (2010) estimate it to be 0.56 for Australia. As a sensitivity analysis, we set the value for this parameter value to 0.9 and simulated long-run implications of the pension reform.…”

The Australian Phillips Curve and More

“…The dynamics of unemployment in Australia, as in all developed countries, has no empirically accurate explanation in the mainstream economics and is chiefly based on pure theoretical assumptions on labor market. Karanassou and Sala (2009) presented a multi-equation labor market model comprising labor demand, wage setting and labor supply equations. The main goal was to describe the most prominent changes in the rate of unemployment: the high-amplitude increase between 1973 and 1983 and the fall from 1993 to 2006.…”