The views expressed in this paper are ours alone and do not necessarily reflect the views of the Reserve Bank of Australia. We are grateful to Warren Tease, Gordon de Brouwer and participants at seminars at the Reserve Bank of Australia and the University of Sydney for helpful comments and suggestions. i ABSTRACT The 1980s witnessed large increases in corporate debt and sustained asset price in...

Previously measured uncertainty shocks using the U.S. data show a hump-shape time path: Uncertainty rises for two years before its decline. Current literature on the effects uncertainty on macroeconomics, including housing, has not accounted for this observation. Consequently, the literature on uncertainty and macroeconomics is divided on the effects and the propagation mechanism of uncertainty...

This paper shows that corporate debt type, maturity and priority structures and their determinants are not homogeneous across firms of different size. Small firms use leasing and bank loans and overdraft while large companies rely on loan capital, convertible and subordinated loans. Small companies depend more on secured debt while large companies’ debt is unsecured and subordinated. The result...

Policy makers in Europe have been concerned that lack of product market competition have led productivity to lag behind the US. Theoretical models are ambiguous about the direction of the effect that product market competition should have on productivity. On the one hand increasing competition lowers firm’s profits and thus reduces incentives to exert effort (the Schumpeterian effect), on the o...

In the regulatory state, agency leaders face a fundamental choice: should they “consume” or should they “invest?” “Consume” means launching high profile cases and rule-making. “Invest” means developing and nurturing the necessary infrastructure for the agency to handle whatever the future may bring. The former brings headlines, while the latter will be completely ignored. Unsurprisingly, consum...