Government Spending Cycles: Ideological or Opportunistic?

ands. The time series analysis, covering the period 1953–1993, allows for different types of government spending. In general, spending is inspired by ideological and opportunistic motives: all government expenditure categories show an upward drift during election times and the partisan motives behind government spending are clearly revealed: left-wing cabinets attach greater importance to social security and health care than right-wing cabinets and right-wing cabinets value expenditure on infrastructure and defense more than left-wing parties. Constructive comments by Frans van Winden, Wilko Letterie, Peter Cornelisse, Arie Ros, André de Moor, Harry ter Rele and an anonymous referee are gratefully acknowledged

Base money rules in the United Kingdom

SIGLEAvailable from British Library Document Supply Centre-DSC:9350.8308(BE-WP--45) / BLDSC - British Library Document Supply CentreGBUnited Kingdo

Monetary policy for an open economy An alternative framework with optimizing agents and sticky prices

Issued under the auspices of the Centre's programme in International MacroeconomicsAvailable from British Library Document Supply Centre-DSC:3597.9512(no 2756) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo

Timeless perspective versus discretionary monetary policy in forward-looking models

Issued under the auspices of the Centre's research programme in International MacroeconomicsAvailable from British Library Document Supply Centre-DSC:3597.9512(no 2752) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo

EXCHANGE RATE STABILISATION, LEARNING AND THE TAYLOR PRINCIPLE

The paper explores whether central banks can keep their interest rates independent from given foreign rates, and to what extent interest policies designed to stabilise nominal exchange rate changes can be applied instead of, or in addition to, the traditional interest rate response to inflation gaps. This modification of a Taylor Rule is analysed in a simple macro model with some New Keynesian features. Information is imperfect; agents cannot build rational expectations but try to learn 'true' market relations. Results show that the Taylor Principle can be generalised in an open economy with flexible exchange rates. Copyright 2007 The Authors Journal compilation 2007 Blackwell Publishing Ltd/University of Adelaide and Flinders University .

International Shocks on Australia - The Japanese Effect

Although Australia has an equivalently large trading relationship with Japan and the US, current macro models often incorporate only US variables in the external sector of Australia. This paper explores the consequences of including both US and Japanese effects in the international sector of a SVAR model of Australia. The results indicate the significance of the Japanese effects. Excluding Japan results in an overstatement of the impact of US based shocks on the Australian economy. When Japan is included, US based shocks remain dominant in explaining Australian outcomes, but the responses are moderated compared with a model incorporating only a US based external sector. This has important implications for domestic policy responses to international shocks. Without the influence of Japan, domestic monetary policy will over-react to a US based shock