RDP 7904: Some Aspects of RBA76 and RBF1 Appendix A. Model Specification for RBA76
September 1979
1. Household expenditure, demand for money
2. Proportional change capital stock
3. Proportional change in employment, normal output
4. Exports
5. Imports, desired inventories, and sales
6. Output of goods
7. Price of output
8. Price of government current expenditure
9. Price of exports
10. Average weekly earnings
11. Labour supply
(1.5) Private final consumption expenditure on rent (including imputed rent)
(1.6) Private gross fixed capital expenditure on dwellings
(1.7) Dwelling construction time, ratio
(1.8) Private dwelling commencements
(1.9) Private gross fixed capital expenditure on other building
(1.10) Private gross fixed capital expenditure on equipment
(2) SUPPLY
(2.1) Increase in stocks – private non-farm desired sales
(2.2) Imports of endogenous goods
(2.3) Stock valuation adjustment for private non-farm stocks
(3) WAGES AND PRICES
(3.1) Award wages: minimum weekly wage rate, adult males Pre-indexation
(3.2) Implicit deflator for private final consumption expenditure on household durables
(3.3) Implicit deflator for private final consumption expenditure on motor vehicles
(3.4) Implicit deflator for private final consumption expenditure on other non-durables
(3.5) Implicit deflator for private final consumption expenditure on rent (including imputed rent)
(3.6) Implicit deflator for private gross fixed capital expenditure on dwellings
(3.7) Implicit deflator for private gross fixed capital expenditure on other buildings and construction
(3.8) Implicit deflator for private gross fixed capital expenditure on equipment
(3.9) Implicit deflator for government final consumption expenditure
(3.10) Implicit deflator for government fixed capital expenditure
(3.11) Implicit deflator for the level of private non-farm stocks
(3.12) Implicit deflator for home consumption of farm goods
(3.13) Consumer price index
(3.14) Price expectations
(4) EMPLOYMENT
(4.1) Wage and salary earners in civilian non-farm employment
(4.2) Registered vacancies
(4.3) Unemployment: registered applicants
(5) BALANCE OF PAYMENTS
(5.1) Net apparent private capital inflow
(6) FINANCIAL
(6.1) Trading bank fixed deposits held by the non-bank private sector
(6.2) Certificates of deposit held by the non-bank private sector
(6.3) Savings banks deposits held by the non-bank private sector
(6.4) Building society deposits held by the non-bank private sector
(6.5) Government securities held by the non-bank private sector
(6.6) Notes and coin held by the non-bank private sector
(1.6.7) Advances by trading banks
(6.8) Mortgage approvals by trading banks
(6.9) Notes and coin held by trading banks
(6.10) Certificates of deposit supply response
(6.11) Mortgage approvals by savings banks
(6.12) Notes and coin held by savings banks
(6.13) Advances of building societies
(6.14) Mortgage approvals by building societies
(6.15) Theoretical yield on Commonwealth Government securities with two years to maturity
(7) TAXES
(7.1) Indirect tax payments – customs duties
(7.2) Indirect tax payments – gross payroll tax
(7.3) Indirect tax payments – sales taxes
(7.4) Indirect tax payments – excise duties
(7.5) Non-PAYE personal income.tax payments (annual)
(7.6) Company tax payments (annual)
(7.7) Direct income taxes payable
(7.8) Gross PAYE personal income tax
(8) INCOMES
(8.1) Wages, salaries and supplements, non-farm
(8.2) Wages, salaries and supplements, farm
(8.3) Income from dwelling rent
(8.4) Income from non-farm unincorporated enterprises
(8.5) Income from dividends
(8.6) Gross operating surplus of dwellings owned by persons
(8.7) Gross operating surplus of non-farm unincorporated enterprises
Note: A subscript of zero indicates a constant. Variables used in the model are:[52]
(i) Endogenous
| APB | Principal outstanding (Advances) of permanent building societies |
| ATT | Loans, advances and bills discounted of all trading banks, less term and farm development loans |
| BKP | Net apparent private capital movements |
| cf | Real private final consumption expenditure on food |
| chd | Real private final consumption expenditure on household durables |
| cmv | Real private final consumption expenditure on purchase of motor vehicles |
| cndo | Real private final consumption expenditure on non-durables excluding food and rent |
| cr | Real private final consumption expenditure on rent |
| DCDT | Certificates of deposit |
| DCT | Dwelling construction time ratio |
| DFT | Fixed deposits of the public (excluding certificates of deposit) with all trading banks |
| DPB | Deposits with Permanent Building Societies |
| DPS | Deposits of the public with savings banks |
| ds | Real total value of private dwelling commencements |
| GSP | Face value of the public's holdings of Australian Government Securities |
| ic | Real gross fixed capital expenditure on private building and construction |
| id | Real gross fixed capital expenditure on private dwellings |
| ie | Real gross fixed capital expenditure on private equipment |
| iinf | Real investment in non-farm stocks |
| ISVANF | Valuation adjustment for (current price) non-farm stocks |
| LMAP | Mortgage approvals of permanent building societies |
| LMAS | Mortgage approvals of savings banks |
| LMAT | Mortgage approvals of trading banks |
| mgo | Real imports of endogenous goods |
| NCP | Notes and coin in the hands of the public |
| NCS | Notes, coin and deposits with the Reserve Bank of all savings banks |
| NCT | Notes, coin and cash balances with the Reserve Bank of all trading banks |
| NU | Unemployment, registered applicants basis (000's persons) |
| NVAC | Vacancies, registered basis (000's persons) |
| NWCNF | Wage and Salary earners in non-farm civilian employment (excl. trainee teachers) (000's persons) |
| Pcg | Implicit deflator for Government final consumption, index |
| PchdBT | Implicit deflator for consumption of household durables, index, before tax |
| Pchf | Implicit deflator for home consumption of farm goods, index |
| PcmvBT | Implicit deflator for consumption of motor vehicles, index, before tax |
| PcndoBT | Implicit deflator for consumption of non-durables excluding food and rent, index, before tax |
| Pcpi | Consumer price index – all items, index |
| Pcr | Implicit deflator for consumption of rent, index |
| PEWA | Price expectations, % p.a. |
| Pic | Implicit deflator for other building and construction, index |
| Pid | Implicit deflator for private dwellings, index |
| Pie | Implicit deflator for private equipment, index |
| Pig | Implicit deflator for Government capital expenditure, index |
| Pkinf | Implicit deflator for stocks of non-farm stocks, index |
| RCD | Weighted average yield on three month certificate of deposit |
| RGS | Theoretical yield on Australian Government securities with two years to maturity |
| TXC | Customs duty tax paid |
| TXE | Excise duty paid |
| TXP | Gross payroll tax paid |
| TXS | Sales tax paid |
| TYCP | Company tax payments |
| TYPL | Direct taxes payable on household income |
| TYPPG | Gross PAYE personal income tax payments |
| TYPPNP | Non-PAYE personal income tax payments |
| WMA | Minimum weekly wage rate – adult males ($/week) |
| YDIV | Income from dividends |
| YDR | Income from dwelling rent |
| YGOSD | Gross operating surplus of dwellings owned by persons |
| YGOSUNF | Gross operating surplus of non-farm unincorporated enterprises |
| YUNF | Income from non-farm unincorporated enterprises |
| YWSSF | Farm wages, salaries and supplements |
| YWSSNF | Non-farm wages, salaries and supplements |
(ii) Exogenous or determined by non-core endogenous equations
| ATS | Loans, advances and bills discounted of all savings banks |
| B | Monetary base |
| BD | Percentage change in award wages implied by basic or national wage decisions |
| CNDO$ | Private final consumption expenditure on non-durables excluding food and rent |
| DFRT | Free deposits of all trading banks DFRT = (1.91(K1, + K2) − K3).DTT |
| DTS | Total deposits with savings banks |
| DTT | Deposits of the public with all trading banks plus government and inter-bank deposits with all trading banks |
| ER$US | Exchange rate between Australia and U.S. |
| GCB | Government's cash balances with the Reserve Bank. Includes Reserve Bank financing of state governments “Australian Government: Statement of Financial Transactions”. Confidential source for state government financing |
| GDP$ | Gross domestic product |
| gdpnf | Real gross domestic non-farm product (1974/75 prices) |
| gdpnfp | Real potential non-farm gross domestic product |
| GFR | Reserve Bank holdings of gold andforeign exchange, measured on a transactions basis |
| GFRADJ | Discrepancy in equation for Reserve Bank holdings of gold and foreign exchange. Caused by timing and valuation differences |
| GTT | Australian Government debt outstanding |
| gvpf | Real gross value of farm production |
| GVPF$ | Gross value of farm production |
| J2A | Two quarter moving average |
| J4A | Four quarter moving average |
| J4P | Four quarter percentage change |
| J3S | Three quarter sum |
| J4S | Four quarter sum |
| JYP.PCPI | The percentage change in the consumer price index since the last non-zero increase in the metal trades margins judgements, % p.a. |
| kc | Real stock of other building and construction |
| kd | Real stock of dwellings |
| ke | Real stock of equipment |
| kinf | Real stock of non-farm stocks |
| K1 | SRD ratio |
| K2 | LGS ratio |
| K3 | Proportion of total deposits of trading banks held in term and farm development loans |
| LB | Liquidity base – the sum of Reserve Bank holdings of gold and foreign exchange, government debt net and miscellaneous Reserve Bank accounts |
| LCMVN | New credits for the purchase of new motor vehicles |
| LMA | Value of mortgage approvals for new and used dwellings |
| NEF | Total farm employment (000's persons) |
| NULCNF | Normal unit labour costs, non-farm |
| Pc | Implicit deflator for private consumption, index |
| Pcf | Implicit deflator for consumption of food, index |
| Pchd | Implicit deflator for consumption of household durables, index |
| Pcmv | Implicit deflator for consumption of motor vehicles, index |
| Pcndo | Implicit deflator for consumption of non-durables excluding food and rent, index |
| Pgdpnf | Implicit deflator for gross non-farm domestic product, index |
| Pgneh | Implicit deflator for home produced gross national expenditure, index |
| Pi | Implicit deflator for total private investment, index |
| Pmat | Implicit deflator for imports of endogenous goods after tariffs, index |
| Pmgo | Implicit deflator for imports of endogenous goods, index |
| PRKE | Implicit rental price of the services of construction capital |
| PRKE | Implicit rental price of services of equipment capital |
| Pw | World price index |
| Pxgf | Implicit deflator for exports of farm goods, index |
| QD | Variable to proxy the effects of bearing demand for trading bank advances 1 in 1973(3) – 1974(2) 0 otherwise |
| QMEB | Dummy variable to allow for embargo on overseas borrowings |
| QMTAR | Dummy variable for effects of tariff changes in 1973(3) on imports |
| QNU | Numbers employed under government employment assistance schemes (including NEAT) |
| QNWCNF | Numbers employed under government employment assistance schemes (excluding NEAT) |
| QPB1 | Variable to proxy run on permanent building societies deposits −1 in 1974(4) 0 otherwise |
| QPB2 | Variable to proxy run on permanent building societies deposits −1 in 1973(2) 2 in 1973(3) 0 otherwise |
| QPB3 | Variable to proxy the effects of housing boom 1 in 1973(1), (2) 0 otherwise |
| QRDC | Ratio of company depreciation to total depreciation |
| QRDCA | Ratio of company depreciation (historical cost) to total depreciation (replacement cost) |
| QTYPL | Adjustment to direct taxes payable on income – health insurance payments |
| QRW1 | Weight on dwellings in consumer price index |
| QRW2 | Weight on rent in consumer price index |
| QRW3 | Weight on household durables in consumer price index |
| QRW4 | Weight on other non-durables in consumer price index |
| QRW5 | Weight on motor vehicles in consumer price index |
| QRW6 | Weight on food in consumer price index |
| QS1 | First quarter seasonal dummy variable |
| QS2 | Second quarter seasonal dummy variable |
| QS3 | Third quarter seasonal dummy variable |
| QS4 | Fourth quarter seasonal dummy variable |
| Qtime | Time trend |
| QW74 | Dummy variable to account for wage explosion in 1974 |
| RADV | Weighted average rate of interest on advances by Major Trading Bank, % |
| RASB | Interest rate on housing advances of savings banks, % |
| RCHD | Sales tax rate on household durables, % |
| RCMV | Sales tax rate on motor vehicles, % |
| RCS | Statutory tax rate.on taxable company profits, ratio |
| REURO | London 3 month Eurodollar rate, % |
| REX | Quasi-statutory rate of excise duty, index |
| RFD | Maximum interest rate on fixed deposits of all trading banks, % |
| RGM | Theoretical yield on Commonwealth Government securities with ten years to maturity, % |
| RHMT | Trading bank mortgage rate, % |
| RMOR | Interest rate on private first mortgages, N.S.W., % |
| RP | Gross payroll tax rate, ratio |
| RPBL | Interest rate on permanent building society mortgage loans (weighted average of states), % |
| RPBS | Interest rate on permanent building society deposits (weighted average of states), % |
| RPS | Statutory tax rate on taxable personal income, whole of financial year rate, index |
| RPSP | Statutory tax rate on personal income as announced each quarter |
| RSB | Interest rate on Australian Savings Bonds, % |
| RSD | Interest rate on Savings bank deposits (average of minimums), % |
| RSO | Sales tax rate on other non-durables, % |
| SLT | Total secured lending to permanent building societies (government plus non-government) |
| v | Variable deposit ratio |
| TYCA | Company tax allowances |
| TYNPA | Non-PAYE tax allowances |
| TYPPA | Estimated changes to PAYE collections not due to tax rate changes |
| WE | Average weekly earnings per employed male unit ($/week) |
| xgf | Real exports of farm goods |
| YCNID | Net interest paid plus dividends received – companies |
| YCSVA | Stock valuation adjustment for company stocks |
| YDEPC | Depreciation allowances – companies |
| YGOSC | Gross operating surplus of companies |
| YHNP | Income base for non-PAYE tax payments |
| YWSS | Wages, salaries and supplements |
| YWSSNF | Non-farm wages, salaries and supplements |
Footnote
Unless otherwise stated variables are in current prices. [52]