Where do Australians invest?

The rapid increase in international capital flows is one of the most significant developments in the global economy in recent decades. International portfolio diversification brings potential benefits to investors by offering investors the opportunity to insulate their portfolios from domestic risks associated with a down turn in local asset prices. The Australian investment environment has been progressively liberalised beginning with the removal of foreign exchange controls in 1987, and the movement to a floating exchange rate regime, other milestones included opening up the banking sector to foreign competition. Until recently, data on the level and geographical pattern of international portfolio investment has been inadequate. In recognition of this fact the International Monetary Fund (IMF) commenced in the mid nineties a pioneering comprehensive survey of the geographic structure of the foreign portfolios (equity and long-term bonds). The first publication covered the 1997 position of foreign portfolios held by the residents of twenty-nine countries, including Australia (IMF 2000), data from a follow up survey relating to 2001 international portfolio holdings was made available in 2003. In this paper we analyse the Australian data reported in the surveys by providing an analysis of the geography of international portfolio investment (equity and long-term securities). We find that countries most open to trade and hence most vulnerable to external shocks tend to diversify more by holding a higher percentage of their portfolios in foreign assets, compared to other countries. Australia appears to be quite outward looking in its investment behaviour, suggesting that Australian investors recognise the advantages of international diversification. However, a cross country analysis of the pattern of international portfolio investment indicates that the Australian portfolio investment position is not proportional to the overall economic or financial market size of the destination countries global standing, but instead matches Australian trade patterns surprisingly closely, here the US is over represented in the case of Australia's international portfolio investment position. Does this reflect a preference for investing in countries made familiar by trade and other relations? If so, this portfolio may imply sub-optimal strategies by Australian investors

How Working age People with Disabilities Fared over the 1990s Business Cycle

Using data from the March Current Population Survey (CPS) we show that while the longest peacetime economic expansion in United States history has increased the economic well-being of most Americans, the majority of working age men and women with disabilities have been left behind. Robust economic growth since the recession of the early 1990s has lifted nearly all percentiles of the income distribution of working age men and men without disabilities beyond their previous business cycle peak levels of 1989. In contrast, the majority of working age men and women with disabilities did not share in economic growth over this period. Not only did their employment and labor earnings fall during the recession of the early 1990s but their employment and earnings continued to fall during the economic expansion that followed

Economics of Disability Research Report #5: Economic Outcomes of Working-Age People with Disabilities over the Business Cycle – an Examination of the 1980s and 1990s

We examine the rate of employment and the household income of the working-age population (aged 25-61) with and without disabilities over the business cycles of the 1980s and 1990s using data from the March Current Population Survey and the National Health Interview Survey. In general, we find that while the employment of working-age men and women with and without disabilities exhibited a procyclical trend during the 1980s business cycle, this was not the case during the 1990s expansion. During the 1990s, the employment of working-age men and women without disabilities continued to be procyclical, but the employment rates of their counterparts with disabilities declined over the entire 1990s business cycle. Although increases in disability transfer income replaced a significant fraction of their lost earnings, the household income of men and women with disabilities fell relative to the rest of the population over the decade

Direct Determinations of the Redshift Behavior of the Pressure, Energy Density, and Equation of State of the Dark Energy and the Acceleration of the Universe

One of the goals of current cosmological studies is the determination of the expansion and acceleration rates of the universe as functions of redshift, and the determination of the properties of the dark energy that can explain these observations. Here the expansion and acceleration rates are determined directly from the data, without the need for the specification of a theory of gravity, and without adopting an a priori parameterization of the form or redshift evolution of the dark energy. We use the latest set of distances to SN standard candles from Riess et al. (2004), supplemented by data on radio galaxy standard ruler sizes, as described by Daly and Djorgovski (2003, 2004). We find that the universe transitions from acceleration to deceleration at a redshift of about 0.4. The standard "concordance model" provides a reasonably good fit to the dimensionless expansion rate as a function of redshift, though it fits the dimensionless acceleration rate as a function of redshift less well. The expansion and acceleration rates are then combined with a theory of gravity to determine the pressure, energy density, and equation of state of the dark energy as functions of redshift. Adopting General Relativity as the correct theory of gravity, the redshift trends for the pressure, energy density, and equation of state of the dark energy out to redshifts of about one are determined, and are found to be generally consistent with the concordance model.Comment: 8 pages, 5 figures. Invited presentation at Coral Gables 200

The Transformation in Who is Expected to Work in the United States and How it Changed the Lives of Single Mothers and People with Disabilities

In the 1990s, social expectations of single mothers shifted towards the notion that most should, could, and would work, if given the proper incentives. This shift in expectations culminated in the passage of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996, commonly known as welfare reform. As a result, ADFC/TANF caseloads fell along with cash transfers to single mothers who did not work. A decade later the earnings and household income of single mothers are significantly higher and moving more in synch with the U.S. economy. In stark contrast and despite espoused goals to the contrary, public policies toward working age men and women with disabilities have remained imbued with the notion that most cannot and thus, would not work, no matter what incentives they faced. As a result, SSDI/SSI expenditures and caseloads have increased and the earnings and household income of working age men and women with disabilities have fallen, leaving them even further behind the average working age American than they were a decade ago. Using data from the Current Population Survey we follow the economic well-being and employment of single mothers and working age men and women with disabilities over the past two major United States business cycles (1982-1993 and 1993-2004) and show that despite the dramatic decline in AFDC/TANF funding, single mothers’ economic well-being, labor earnings and employment all have risen substantially. In contrast, despite the dramatic increase in SSDI/SSI funding, the economic wellbeing of working age men and women with disabilities remained stagnant, as their labor earnings and employment plummeted.

Curing the Dutch Disease: Lessons for United States Disability Policy

In the 1990s, the United States reformed welfare programs targeted on single mothers and dramatically reduced their benefit receipt while increasing their employment and economic wellbeing. Despite increasing calls to do the same for working age people with disabilities in the U.S., disability cash transfer program rolls continue to grow as their employment rates fall and their economic well-being stagnates. In contrast to the failure to reform United States disability policy, the Netherlands, once considered to have the most out of control disability program among OECD nations, initiated reforms in 2002 that have dramatically reduced their disability cash transfer rolls, while maintaining a strong but less generous social minimum safety net for all those who do not work. Here we review disability program growth in the United States and the Netherlands, link it to changes in their disability policies and show that while difficult to achieve, fundamental disability reform is possible. We argue that shifts in SSI policies that focus on better integrating working age men and women with disabilities into the work force along the lines of those implemented for single mothers in the 1990s, together with SSDI program changes that better integrate private and public disability insurance programs along the lines of the reforms in the Netherlands, offer the best hope of improving their employment rates and economic well-being as well as reducing SSDI/SSI program growth.