This paper investigates the international transmission of fiscal shocks between two closely-linked, open economies. We estimate impulse response functions using a semi-structural vector auto regressive (VAR) model and quarterly data from Australia and New Zealand for the period 1973:3–2008:4. We compare our empirical results with impulse response functions from a calibrated two-country international real business cycle model with habit formation and adjustment costs to investment. We show that a positive shock to Australian government consumption leads to an increase in Australian output initially and then to a decline in the medium term, while the New Zealand output is negatively affected both in the short and medium term. This result is in line with the recent literature that reports beggar-thy-neighbour effect of positive government spending shocks.

This study constructs a quarterly hedonic price index using 64,203 artworks, by seventy-one well-known modern and contemporary Australian artists, sold at auction houses over the period 1986–2009. The hedonic regression model includes characteristics such as name and living status of the artist, the size and medium of the painting, and the auction house, quarter and year in which the painting was sold. The resulting index indicates that returns on Australian fine-art averaged one per cent in nominal terms over the period from quarter 1 1986 to quarter 4 2009 with a standard deviation of seventeen per cent. During the global financial crisis spanning quarter 1 2008 and quarter 4 2009, the average art returns declined in nominal terms by close to six per cent with a standard deviation of twenty-one per cent. This study also shows that over the entire period the art market only marginally underperformed the stock and housing markets. The low correlations between these markets suggest the benefits of portfolio diversification.

This paper examines the determinants of foreign patent activity in the Canadian manufacturing sector at the industry level. Since foreign patenting is one of the channels of technology transfer to a country, this study could also show the transfer of foreign technology into Canadian industries measured by foreign patent activity. The paper suggests that the patent activity of foreign countries is the most important factor for receiving foreign patents in Canada. Moreover, imports and foreign direct investments are important vehicles this context. The distance between countries has a negative impact on receiving foreign patents. The impacts of R&D intensity and human capital on receiving foreign patents are mixed and insignificant, but industries with a higher R&D intensity are better recipients of foreign patents.

This paper examines the time variation form of the systematic risk measurement, beta, in Australian industry sectors. By using a semi-parametric approach, the systematic risk measurement, beta, is defined as a combination of one stable parametric component and one varying non-parametric component. Two categories of industries were identified. The Energy, Material, Mining, Industrial and Property Trust industries had a generally increasing beta for most of the sample period, while the Consumer Discretionary, Financials Excluding Property Trust, IT and Telecommunications had a decreasing beta for the same period. The betas of the Health and Utility industries are more stable than others. The variation of industry risk is linked with the market conditions, as well as the change of interest rates.