A detailed review of the education sector in Australia as in the data provided by the 2006 edition of the OECD's annual publication, 'Education at a Glance' is presented. While the data has shown that in almost all OECD countries educational attainment levels are on the rise, with countries showing impressive gains in university qualifications, it also reveals that a large of share of young people still do not complete secondary school, which remains a baseline for successful entry into the labour market.

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Education at a Glance

Abstract The purpose of this study is to determine whether training will increase the amount of time an individual spends in employment over an extended period. Training can influence this quantity through an effect on either the frequency or the duration of employment spells. Continuous time duration models provide a natural framework for modelling the influence of training on both the number and length of employment episodes. The estimation results obtained indicate that participation in a private training program improves the employment prospects of women by increasing both the frequency and duration of employment spells. The implications are less clear for men in that participation in private programs increases the length of both employment and nonemployment episodes. In the case of government programs participation in training leads to a decline in the amount of time spent employed by both women and men; however, this effect is based upon a small number of observations.

The impact of training on the frequency and duration of employment: an econometric analysis of the experiences of youth

Both interest rates and inflation rates in the Euro area have reached levels dangerously close to zero. By the strategy of quantitative easing the ECB has been providing ample liquidity – yet without lasting success. Several asymmetries in policy transmission and monetary policy making have been acknowledged when interest rates hit the zero bound. This paper starts with a short review of these asymmetries. Afterwards it turns to the issues of credibility and commitment. It is argued that the inflation forecasts of the ECB are central for the communication strategy. In the current situation they should signal the willingness to stick to low interest rates. Yet the ECB is shown to be rather more optimistic than other forecasters when the prevailing threats of deflation are concerned.

Monetary Policy at the Zero Lower Bound

This paper studies the synchronization of financial cycles across 17 advanced economies over the past 150 years. The comovement in credit, house prices, and equity prices has reached historical highs in the past three decades. The sharp increase in the comovement of global equity markets is particularly notable. We demonstrate that fluctuations in risk premiums, and not risk-free rates and dividends, account for a large part of the observed equity price synchronization after 1990. We also show that U.S. monetary policy has come to play an important role as a source of fluctuations in risk appetite across global equity markets. These fluctuations are transmitted across both fixed and floating exchange rate regimes, but the effects are more muted in floating rate regimes.

Global Financial Cycles and Risk Premiums

Is monetary policy less effective in boosting aggregate demand and output during periods of persistently low interest rates? This paper reviews the reasons why this might be the case and the corresponding empirical evidence. Transmission could be weaker for two main reasons: (i) headwinds, which would typically arise in the wake of balance sheet recessions, when interest rates are low; and (ii) inherent non-linearities, which would kick in when interest rates are persistently low and would dampen their impact on spending. Our review of the evidence suggests that headwinds during the recovery from balance-sheet recessions tend to reduce monetary policy effectiveness. At the same time, there is also evidence of inherent non-linearities. That said, disentangling the two types of effect is very hard, not least given the limited extant work on this issue. In addition, there appears to be an independent role for nominal rates in the transmission process, regardless of the level of real (inflation-adjusted) rates.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2957961_code1109023.pdf?abstractid=2957961&mirid=1&type=2

Is monetary policy less effective when interest rates are persistently low

https://www.econstor.eu/bitstream/10419/129618/1/852173105.pdf

Spillover Effects from Euro Area Monetary Policy across Europe: A Factor-Augmented VAR Approach

We study the macroeconomic effects of monetary policy during financial crises using a Bayesian panel vector autoregressive (PVAR) model for 20 advanced economies. We interact all of the endogenous variables with financial crisis dummies, which are constructed using the narrative approach. We also distinguish between an acute initial phase of financial crises and a subsequent recovery phase. We show that an expansionary monetary policy shock has large positive effects on output and inflation during the acute phase of a financial crisis. These effects are larger than those during non-crisis periods. Decreased uncertainty as well as increases in consumer confidence and share prices explain these large effects, whereas these variables are much less relevant for monetary policy transmission outside financial crises. Counterfactual analysis shows that the transmission mechanism would be impaired without the effects of monetary policy on these variables, where credit would not react at all and the response of output would be substantially lower. During the recovery phase of a financial crisis, output and inflation are generally non-responsive to monetary policy shocks.

Monetary policy during financial crises: Is the transmission mechanism impaired?

The authors analyze cyclical co-movement in credit, house prices, equity prices, and long-term interest rates across 17 advanced economies. Using a time-varying multi-level dynamic factor model and more than 130 years of data, they analyze the dynamics of co-movement and compare recent developments to earlier episodes such as the early era of financial globalization from 1880 to 1913 and the Great Depression. They find that joint global dynamics across various financial quantities and prices as well as variable-specific global co-movements are important to explain fluctuations in the data. From a historical perspective, global co-movement in financial variables is not a new phenomenon. For equity prices, however, global cycles play currently a historically unprecedented role, explaining more than half of the fluctuations in the data. Global cycles in credit and housing have become much more pronounced and longer, but their importance in explaining dynamics has only increased for some economies including the US, the UK and Nordic European countries. Regarding GDP, the authors also find an increasing role for a global business cycle.

https://www.econstor.eu/bitstream/10419/195062/1/1663135037.pdf

Global Financial Cycles since 1880

We study the effects of monetary policy on output during financial crises. We use a large panel of advanced and emerging economies to guarantee a sufficiently high number of financial crisis episodes. Financial crises dummy variables, which are constructed based on the narrative approach, are interacted with other key macroeconomic variables in a panel VAR. Theory suggests that monetary policy might be more effective during financial crises if it can ease malfunctioning of financial markets for example by loosening credit constraints or restoring confidence. Alternatively, deleveraging and uncertainty might predominate and make the economy less interest rate responsive and monetary policy less effective during financial crises. Taking a sample from the mid 1980s to today, we find that an expansionary monetary policy shock is very effective in raising GDP during the recessionary period of a financial crisis. The effect is stronger than in non-crisis times. In contrast, during the recovery period of a financial crisis, monetary policy has a very small effect on GDP. These differences can be explained by a confidence channel. During the joint occurrence of a recession and a financial crisis an expansionary monetary policy shock increases consumer confidence and GDP. During the following recovery monetary policy has no effects on confidence or GDP. Other variables like credit, housing prices and exchange rates can at most partially explain differences in transmission between the different regimes.

https://www.ijcb.org/journal/ijcb19q4a3.pdf

Adult learning is seen as a key factor for enhancing employment, innovation and growth. The aim of this paper is to understand the points in the life cycle at which adult learning takes place and whether it leads to reaching a medium or high level of educational attainment. We perform a synthetic panel analysis of adult learning for cohorts aged 25–64 in 27 European countries using the European Union Labour Force Survey. We find that investment across the life cycle by cohorts older than 25 still occurs: participation in education and training as well as educational attainment increase observably across all cohorts. We also find that the decline with age slows down, or is even reversed for older cohorts, for both participation in education and educational attainment. Finally, we can identify cross-country differences in approach. In Nordic countries, adult learning is achieved primarily through participation in education and training without adding to formal educational attainment. In central Europe, adul...

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Galina Potjagailo

Papers

Spillover Effects from Euro Area Monetary Policy across Europe: A Factor-Augmented VAR Approach

Monetary policy during financial crises: Is the transmission mechanism impaired?

Global Financial Cycles since 1880

Monetary policy during financial crises: Is the transmission mechanism impaired?

Learning at every age? Life cycle dynamics of adult education in Europe