Centre for Applied Macroeconomic Analysis

The Centre for Applied Macroeconomic Analysis (CAMA) is located in the Crawford School of Public Policy at the Australian National University and was established in 2003 to bring together economists working on applied macroeconomic and financial market issues throughout Australia and across the globe. Its objectives are to advance research and post-graduate training in applied macroeconomic and financial issues.

CAMA was founded by Professor Warwick McKibbin who is also the current director. The deputy director is Professor Ippei Fujiwara.^[1] Former directors include Professor Shaun Vahey and Professor Renée Fry-McKibbin,^[2] and deputy directors include Professor Mardi Dungey, Professor Heather Anderson and Professor Renee Fry.

CAMA Network

CAMA is an active research network among scholars of macroeconomics globally, with much of the activity occurring virtually. Research associates ^[3] join a research program developed around a topical theme in Macroeconomics. Each program is headed by a program director or directors who are responsible for encouraging active research participation through participation in events ^[4] such as conferences, workshops and seminars, and particularly through submissions to a vibrant working paper series.^[5] CAMA also runs the Shadow RBA Board.^[6] CAMA management also seeks advice from an advisory board.^[7]

Programs

The 12 research programs of CAMA along with their objectives include:

Behavioural Macroeconomics and Complexity

Behavioural macroeconomics seeks to refine our understanding of the discipline by accounting for relevant features of human behaviour that are absent in the standard economics framework. Instead of assuming a hyper-rational representative agent, the basis for analysis are empirically well-documented psychological and sociological factors such as cognitive bias, fairness concerns, herding, and social status. Acknowledging the growing econometric and experimental evidence that human behaviour often fails the predictions of the rational expectations, full-information paradigm, this research program provides an umbrella for all research dedicated to melding the insights from behavioural economics and psychology with modern macroeconomics in a sound and rigorous way.

Climate Change and Energy

Rapid global economic growth, particularly in China and India, has important implications for global energy use as well as causing a rapid rise in greenhouse gas emissions with implication for climate change. This program focuses on the importance of energy use and climate change as well as the associated policy responses on the macro-economy.

Commodities and the Macroeconomy

The implications of demand for resources by emerging market economies and understanding the special features of commodity economies are currently issues for policy makers and investors. Emerging markets in particular are an important driver of the most recent commodity price cycle. This program seeks to understand commodity cycles and their financial market and macroeconomic effects, as well as the interactions between the three from both an emerging and developed country perspective.

Economic Growth and Development

The program focuses on the following key areas:

• Should short-run macroeconomic models for developing countries be different from the received doctrine? Evaluation, critique and extensions of alternative models such as those due to structuralists and to IMF-type policy evaluations. Are there eclectic short-run macroeconomic models better suited for developing countries? Empirical evaluation of the performance of alternative short-run macroeconomic models.

• The political economy of the nexus between fiscal and monetary policy in developing countries. The interaction between a weak banking system, overly controlled central bank, excessive current government spending and poor tax design and administration. Early warning systems on potential crisis. The role of the exchange rate regime.

• The determinants of economic growth and developing countries. Can we identify policies that would enhance growth prospects for developing countries? What evidence relevant to developing countries does the experience of OECD countries in regard to long-term growth and medium-term fluctuation provide?

• The macroeconomics of reconstruction after war and other disasters. Anticipating and dealing with the economic consequence of 'hot spots' - mass migration in response to war, environmental disasters and the like.

Finance and the Macroeconomy

Financial market developments impact directly and indirectly on real economy outcomes, particularly in the short term, and developments in the macroeconomy affect financial markets, systems and institutions. This program brings together work on financial interactions with an assessment of the impact of markets and institutions on the economy and implications for policy. It includes assessment of broader trends in the macroeconomy and finance.

Globalisation and Trade

The objective of this program is to undertake research into design of policies in three areas. The first of these is the overall framework of macroeconomic policy, including the extent to which policy can influence exchange rates in a world of a high degree of capital mobility, and the integration of fiscal and monetary policy in the management of the economy. The second is the extent to which the financial system can be regulated so as to minimise the risk of currency and financial crises, and to lessen the costs of such crises as occur. The third is the way in which the liberalisation of international trade can be managed so as to avoid the growth of preferential discrimination between countries, and the growth of discriminatory trading blocs.

Macroeconomic Policy Frameworks

This program will bring together analytical and policy researchers interested in evaluating and advancing work in areas such as:

• The implications of medium-term fiscal and monetary policy frameworks for: the volatilities of output, interest rates and exchange rates; short run stabilisation policies; intergenerational balance; financial stability; and external stability;

• The role of Governance procedures and associated institutional frameworks, in sustaining the credibility of fiscal and monetary policy frameworks, including the relative roles for policy coordination and operational independence, and the role of enforcement rules in fiscal policy frameworks;

• Macroeconomic policy frameworks for sustainable growth and employment; and

• Appropriate policy frameworks for common currency regimes.

Macroeconomic Theory

This program brings together various research agendas in the area of theoretical macroeconomics. The emphasis is on (i) the construction of macroeconomic models that have well-specific decision-theoretic foundations and equilibrium concepts; and/or (ii) the use of such models to understand observed economic phenomena, analyse policy regimes and other institutional features; and/or (iii) research that refines and expands the set of tools for undertaking research in (i) and (ii).

Macroeconomics and Longer Run Issues

This program covers a range of topics focusing on longer run issues in macroeconomics such as:

(a) Macroeconomics and Health The program focuses on macroeconomic approaches to measuring the economic burden of infectious diseases such as SARS, Avian Flu, Influenza, HIV/AIDS etc. It is becoming increasingly evident that modern epidemics create global economic shocks that by far exceed direct and indirect costs of treatment. The program will combine CGE and epidemiological modelling to study both short-and-long-run effects of the disease outbreak. Epidemiological models of disease dynamics will take into account an increased likelihood of contact with infected individuals from other areas as a result of trade in goods and services and of an increased factor mobility.

(b) Macroeconomics and Aging Demographic change has important impacts on the macro economy through changes in labour supply, human wealth accumulation, consumption and saving decisions, asset accumulation, investment demand and adjustment of asset prices. There are also important impacts on fiscal positions and the balance of payments. The objective of this program is to explore the macroeconomic implications of an aging society within a variety of modeling frameworks.

(c) Macroeconomics and the Environment Environmental change has potentially significant macroeconomic impacts both directly through the links between the environment and economics activity and indirectly through the impact on the macro economy of policies aimed at environmental outcomes such as climate change policy. This sub program will explore the links between changes in the environment and macroeconomics outcomes.

Model Uncertainty and Macro-Econometrics

This program focuses on the role of model uncertainty in empirical macroeconomics. This literature treats the 'true' model as an unobservable - an admission that has implications for many areas of macroeconomic analysis and has generated two distinct research sub-programs. One represents a renewed interest in model evaluation, comparison, selection and combinations when model misspecification is explicitly recognized. A second sub-program is based on accounting for model uncertainty explicitly in constructing predictive densities for objects of economic interest, conducting statistical inference and evaluating policies

Multi-Country Models and Methods

Countries are linked through trade flows and asset markets. The modeling of these interactions has been undertaken in large scale model such as: computable general equilibrium models (for trade); large scale macro-econometric models (aggregated trade and capital flows); and intertemporal general equilibrium models (trade detail and asset flows). There is also an emerging literature of smaller theoretical simulation models particularly of real business cycle and new Keynesian theories which attempt to understand global interdependence better. This program will bring together researchers interested in the linkages between countries and how these linkages impact on our understanding of economic outcomes in small open and large open economies.

Open Economy Macroeconomics

The objective of the Open Economy Macroeconomics (OEM) Program is to further the development and testing of optimization-based OEM frameworks. The main foci of interest of the program are:

• International transmission mechanisms in OEM frameworks

• International relative prices and the international transmission of shocks

• Cooperation and monetary and fiscal stabilization policies in OEM frameworks

CAMA RBA Shadow Board

The CAMA RBA Shadow Board was conceived in August 2011. It consists of nine voting members and one non-voting chair that offer its own policy recommendation the day before the official RBA decision. Members give probabilistic assessments of the appropriate target rate for each round, which are then aggregated. The higher the percentage attached to a given cash rate, greater the confidence that this rate is the appropriate target. From March 2012, each Shadow Board member was invited (but not obliged) to provide a personal comment on monetary conditions and from April 2012, each Shadow Board member was invited to publish longer-term interest rate assessments.

Publications

CAMA has its own working paper series. The working papers published in the CAMA working paper series are also available on RePec (Research Papers in Economics)^[8] and SSRN (Social Science Research Network).^[9]

CAMA also publishes a newsletter.^[10] CAMA members contribute to the content of the newsletter, which includes among other things new members, projects, awards, publications, interviews, and events.

Events

CAMA actively promotes events such as workshops and conferences in Australia and internationally through sponsorship, organization and advertising. CAMA is a representative on the NBER East Asian Seminar in Economics (EASE)^[11] and the National Economic Research Organizations (NERO) network.^[12]

CAMA also hosts the CAMA Macroeconomics Brown Bag Seminars where staff, visitors and PhD students have an opportunity to present their work.

References

1. ↑ "Ippei Fujiwara - Crawford School of Public Policy - ANU". Crawford.anu.edu.au. 2013-07-03. Retrieved 2014-05-15. 
2. ↑ "Reneé McKibbin (Fry) - Crawford School of Public Policy - ANU". Crawford.anu.edu.au. 2013-07-03. Retrieved 2014-05-15. 
3. ↑ "Research Associates - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
4. ↑ "Current events - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
5. ↑ "CAMA Working Paper Series - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
6. ↑ "CAMA RBA Shadow Board - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
7. ↑ "Advisory board - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
8. ↑ RePec
9. ↑ SSRN
10. ↑ "CAMA Newsletter - CAMA - ANU". Cama.crawford.anu.edu.au. 2013-08-15. Retrieved 2014-05-15. 
11. ↑ EASE
12. ↑ NERO

External links

• https://cama.crawford.anu.edu.au/
• https://crawford.anu.edu.au/people/academic/renee-mckibbin-fry
• https://crawford.anu.edu.au/people/academic/ippei-fujiwara