Centre for Applied Macroeconomic Analysis

The Centre for Applied Macroeconomic Analysis, together with the Lowy Institute for International Policy, hosted a major international conference in Sydney on 23 and 24 August 2007. The conference theme was:

"Fiscal Policy Frameworks, Monetary Policy Implications and Intergenerational Financial Funds"

Overview
Program and Presentations
Sponsors
Participants

Overview

Fiscal policy frameworks have traditionally received significantly less attention than monetary policy frameworks, the interaction of fiscal and monetary frameworks and the long-term sustainability of fiscal policy and public debt.

To fill a large and important gap in the literature and the policy debate more broadly, a primary focus of this Conference is on the role and evolution of fiscal policy frameworks, and their short and long run implications for monetary and public debt policies. Global and individual country perspectives will reflect principles, institutional underpinnings, performance and modelling of the policy frameworks.

The specific issues selected for focus on the afternoon of the 24th involve Funding for Longer Term Infrastructure Investment and Intergenerational Financial Funds. The funding of infrastructure investment, and intergenerational funds have important implications for short run and long run fiscal policy, debt sustainability, and monetary policy. Intergenerational financial funds differ considerably in degree of coverage of a country’s long run pension liabilities, in their governance provisions, in their implications for other major financial funds, and in their investment strategies.

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Program and Presentations

The conference program is available for download here.

Thursday 23 August

9am-9:15am
Welcome by Warwick McKibbin (ANU, CAMA, LIIP) and Viv Hall (Victoria University of Wellington, CAMA)

Chair: Viv Hall

9:15am-9:45am
"Overview of the Key Issues - An International Perspective"
David Vines (Oxford University, CAMA)

Fiscal Policy Frameworks: Role, Evolution, Difficulties and Successes
9:45am-10:45am
"The Evolution of Fiscal Policy in Australia"
David Gruen (Australian Treasury)
Discussant: David Hargreaves (Reserve Bank of New Zealand) Slides

10:45am-11:15am
Coffee break

11:15am-12:15pm
"Roles of Fiscal Policy in New Zealand"
Felicity Barker, Bob Buckle and Robert St Clair (New Zealand Treasury)
Discussant: Viv Hall (Victoria University of Wellington, CAMA)

12:15pm-1:30pm
Lunch

Modelling the Policy Interfaces: Small Model Approaches
Chair: Heather Anderson

1:30pm-2:20pm
"What Has Financed Government Debt?"
Hess Chung and Eric Leeper (Indiana University, NBER)
Discussant: Aaron Drew (Reserve Bank of New Zealand) Slides

2:20pm-3:10pm
"Stablising Expectations under Monetary and Fiscal Policy Coordination"
Stefano Eusepi and Bruce Preston (Columbia University, Federal Reserve Bank New York, CAMA)
Discussant: Tim Kam (ANU, CAMA) Slides

3:10pm-3:30pm
Coffee break

Modelling the Policy Interfaces: International Implications of Large Country Imbalances

Chair: Warwick McKibbin

3:30pm-4:20pm
"A Party Without a Hangover? On the Effects of US Government Deficits"
Michael Kumhof and Douglas Laxton (IMF)
Discussant: Jeff Sheen (University of Sydney, CAMA) Slides

7pm-10pm
Conference dinner

Friday 24 August

Fiscal Modelling, and Modelling of Fiscal and Monetary Policy Interfaces
Chair: Adrian Pagan

9am-9:50am
"Is US Fiscal Policy Optimal?"
Nicola Giammarioli (European Central Bank), Luisa Lambertini and Luca Onorante
Discussant: Timo Henckel (ANU, CAMA) Slides

9:50am-10:40am
"Monetary and Fiscal Policy Interaction with Various Degrees and Types of Commitment"
Jan Libich (La Trobe University, CAMA), Andrew Hughes Hallet and Peter Stehlik
Discussant: Iris Claus (Inland Revenue, New Zealand) Slides

10:40am-11:10am
Coffee break

Chair: Bob Buckle

11:10am-12pm
"Identifying Fiscal and Monetary Policy in a Small Open Economy VAR"
Mardi Dungey (Cambridge, CAMA) and Renee Fry (ANU, CAMA)
Discussant: Junsang Lee (ANU, CAMA)

12:15pm-1:15pm
Lunch

Afternoon: Open forum to be held at the Lowy Institute for International Policy, 31 Bligh Street, Sydney

Fiscal Policy, Infrastructure Investment & Intergenerational Funds

Chair: Warwick McKibbin

2pm-2:05pm
Welcome by Professor Keith Houghton, Convenor and Dean of ANU College of Business and Economics

2:05pm-2:10pm
"Introduction"
Warwick McKibbin (ANU, CAMA, LIIP)

2:10pm-3:45pm
"Key Messages from Thursday, and Friday morning sessions"
David Vines (Oxford, CAMA)

"Panel Presentations and Discussion"
John Edwards (HSBC)
Henry Ergas (Charles River Associates) Presentation    Paper
Adrian Orr (New Zealand Superannuation Fund)  Presentation
John Piggott (University of New South Wales)
Ric Simes (Access Economics)

3:45pm-4pm
Coffee break

4pm-5pm
General discussion

5pm
Conference conclusion

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Sponsors

The Centre for Applied Macroeconomic Analysis gratefully acknowledges the support and contributions from the following organisations for funding speakers although they bear no responsibility for any views expressed by participants.

ANU College of Business and Economics
Australian Research Council grant # DP0664024
European Central Bank
Internal Revenue, New Zealand
International Monetary Fund
Lowy Institute for International Policy
New Zealand Superannuation Fund
Reserve Bank of Australia
Reserve Bank of New Zealand
The Treasury, Australia
The Treasury, New Zealand
Victoria University of Wellington, School of Economics and Finance

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List of Participants

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