CBE economists awarded prestigious grant

 Chung Tran and Tim Kam

4 minute read

ANU College of Business and Economics (CBE) Associate Professors Chung Tran and Tim Kam have recently been recognised by the Australian Research Council (ARC) through receipt of prestigious Discovery Projects funding.

Chung will use the funding to develop a new approach to better understanding inequality in Australian living standards, and the role fiscal policy plays in shaping these standards, while Tim will examine banking system competition and the macroeconomy. A brief synopsis of both projects is provided below.

Chung and Tim’s funding successes take the total number of ARC-funded projects involving CBE researchers to 24.

Measuring inequality in living standards

Widening income disparity between rich and poor individuals and households, or growing income inequality, poses unprecedented challenges for Australia and many other OECD countries. Commonly used income inequality measures are based on current year income and, as such, suffer a range of potential biases, including over- and under-representation of certain age groups. By developing inequality measures using whole lifetime income, Chung will more accurately measure how the gains from economic growth have been shared among Australians and how the progressive tax and transfer system redistributes income across households and generations.

“The findings from the research will equip the Australian government with a better policy tool to effectively respond to rising dispersion in living standards due to changing national and global conditions. Overall, the research is expected to inform a more efficient and equitable design of the Australian tax system to sustain economic prosperity and social fairness for Australians in the twenty-first century,” Chung says. 

Unravelling banking system competition

The concentration of Australia’s banking sector gives rise to concerns regarding its efficiency. Tim and the project team will produce new quantitative theories in which banking institutions and the degree of banking-sector competitiveness are endogenous objects. This results in novel incentive trade-offs that connect macroeconomic/regulatory policy to economic wellbeing. These channels have first-order welfare consequences unaccounted for in status-quo models with more “black-box” characterisations of banks. In doing so, the team will contribute to policymakers’ toolkit for improving the health and efficiency of the sector. Ultimately, the team’s work will enhance the productivity and international competitiveness of Australia’s financial system and the broader economy.

The College is always keen to explore research collaborations with the public and private sector and to reconnect with alumni. Please get in touch if you would like to know more about partnering with us.     

(L-R) Associate Professors Tim Kam and Chung Tran | Image: Charissa Kam and The Australian National University