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Associate Professor Peter Docherty

Biography

Peter has a Ph.D. from the University of Sydney in monetary economics and the history of economic thought. This research surveyed the analytical role of an endogenously determined money supply in the history of economic thought, particularly focusing on the economics of Knut Wicksell, J.M. Keynes and Nicholas Kaldor. It also designed a macroeconomic model to provide a monetary explanation of long period employment. Peter has held academic appointments at the University of Sydney, the University of New South Wales and the University of Technology, Sydney. He has taught undergraduate courses in economic principles, monetary economics and financial markets, and postgraduate courses in corporate finance and banking. His principle research interests include the macroeconomic effects of financial and monetary institutional arrangements; the history of monetary economics; and the history of the Australian financial system. He has published papers on the history of monetary thought and is currently completeing a book on endogenous money macro models based on his Ph.D. research.

Associate Professor, Economics Discipline Group
BEc (Syd), MEc (Syd), PhD (Syd)
 
Phone
+61 2 9514 7780

Research Interests

The macroeconomic effects of financial and monetary institutional arrangements, the history of monetary economics, and the history of the Australian financial system.

Can supervise: Yes

Books

Docherty, P.T. 2005, Money and Employment: A Study of the Theoretical Implications of Endogenous Money, 1, Edward Elgar, Cheltenham, UK.
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Chapters

Docherty, P. & Rochon, L.P. 2013, 'The Global Financial Crisis and the Role of Engagement with the Mainstream in the Future of Post Keynesian Economics' in Lee, F.S. & Lavoie, M. (eds), In Defense of Post-Keynesian and Heterodox Economics: Responses to their Critics, Routledge, New York, pp. 212-229.
Docherty, P.T. 2012, 'Keynes's general theory, the quantity theory of money and monetary policy' in Thomas Cate (ed), Keynes's general theory: Seventy-five years later, Edward Elgar, US, pp. 127-157.
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Thirty-five years after the publication of Keynes's General Theory, Harry Johnson examined what appeared at the time to be the end of the 'Keynesian Revolution'. In that paper, Johnson (1971) examined not only the conditions under which Keynes's General Theory had transformed thinking in the 1930s and 1940s about the operation and management of the macroeconomy, he also considered the conditions under which that transformation was in the process of being superseded.
Docherty, P. & Rochlon, L.P. 2012, 'The Global Financial Crisis and the Role of Engagement with the Mainstream in the Future of Post Keynesian Economics' in Lee, F.S. & Lavoie, M. (eds), In Defense of Post-Keynesian and Heterodox Economics: Responses to their Critics, Routledge, New York, pp. 212-229.
Docherty, P.T., Terry, C. & Trayler, R.M. 2004, 'The impact of the Basel II capital accord on Australian banks.' in Gup, B. (ed), The new basel capital accord, Thomson, New York, USA, pp. 305-335.
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Conferences

Docherty, P.T. 2009, 'Interest rate rules in a demand-led Kaldor-Pasinetti-Sraffa-Keynes growth model', Conference on the Political Economy of Central Banking, Toronto, Canada.
Docherty, P.T. & Sadeghian, D. 2009, 'Modelling the overnight rate: Can central banks change the policy rate without changing a financial aggregate?', Canadian Economic Association Conference, Toronto, Canada.
Docherty, P.T. 2008, 'Money and monetary policy in Kaldor-Psinettit-Sraffa-Keynes framework', Seminar Paper, Department of Public Economics, University of Rome, La Sapienza, Rome, Italy.
Docherty, P.T. 2008, 'Comparing post Keynesian monetary policy rules in a Kaldor-Pasinetti-Sraffa-Keynes framework', Eastern Economic Association Annual Conference 2008, Boston, USA.
Docherty, P.T. 2008, 'The political economy of banking regulation-monetary policy interaction', Eastern Economic Association Annual Conference 2008, Boston, USA.
Docherty, P.T. 2007, 'Monetary policy in a Kaldor-Pasinetti-Sraffa-Keynes model with endogenous money', Eastern Economic Association Annual Conference 2007, New York, USA.
Docherty, P.T. 2006, 'Endogenous money non-neutrality and interest - sensitivity in the theory of long period unemployment', Centre for Full Employment and Equity Conference, Centre for Full Employment and Equity Conference, Newcastle, Australia.
Docherty, P.T. 2006, 'Endogenous money, non-neutrality and interest-sensitivity in the theory of long period unemployment', Centre for Full Employment and Equity Conference, Newcastle, Australia.

Journal articles

Docherty, P. 2012, 'Long period interest rate rules in a demand-led Kaldor-Pasinetti-Sraffa-Keynes growth model', Journal of Post Keynesian Economics, vol. 34, no. 3, pp. 521-546.
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Rochon, L.-.P. & Docherty, P. 2012, 'Engagement with the Mainstream in the Future of Post Keynesian Economics', Review of Political Economy, vol. 24, no. 3, pp. 503-518.
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Docherty, P. 2011, 'Keynes's Analysis of Economic Crises and Monetary Policy in the General Theory : Its Relevance after 75 Years', Review of Political Economy, vol. 23, no. 4, pp. 521-535.
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Hunter, K. & Docherty, P. 2011, 'Reducing variation in the assessment of student writing', Assessment & Evaluation in Higher Education, vol. 36, no. 1, pp. 109-124.
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Docherty, P. & Wang, G. 2010, 'Using synthetic data to evaluate the impact of RTGS on systemic risk in the Australian payments system', Journal of Financial Stability, vol. 6, no. 2, pp. 103-117.
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Docherty, P., Tse, H., Forman, R. & McKenzie, J. 2010, 'Extending the Principles of Intensive Writing to Large Macroeconomics Classes', The Journal of Economic Education, vol. 41, no. 4, pp. 370-382.
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Docherty, P.T. 2010, 'Credit evaluation, capital adequacy and asset price inflation: Key issues for prudential regulation after the global financial crisis', International Journal of Applied Economics and Econometrics, vol. 18, no. 4, pp. 29-57.
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Mostihnalyses of the global financial crisis to date have focused on analysing specific features of the 'Crisis including sub-prime loans defaults, the role of structured i~estrnent vehicles, defici~ncies in the performance of credit rating agencies and the reaction of financial markets.to losses sustained on account of these forces. Less attention has been paid to the~c1imate of asset price inflation within., which sub-prime loans were written although increasing , ~ttention has been paid to the regulatory responses. required by the crisis. Th~s paper briefly surveys the theory of financial system functions and prudential regulation, and cqnsiders the implications of this theory for ,understanding the causes of the crisis and the , shape that prudential regulation should take in the light of the crisis. It'argues for the establishment of an independent, public credit rating agency and for the financial system to be regulated functionally, with any entity that issues shorfterm securities (or deposits) against " the holding of risky loans being made subject to Basel II capita1 requirements. It also argues that these requirements be made variable for loans used to finance key assets. in order to reduce the possibility of asset price inflation.
Docherty, P.T. & Tse, H.P. 2010, 'Reducing the expectations gap: Using an academic literacies approach to improve student writing in economics', Australasian Journal of Economics Education, vol. 7, no. 1, pp. 31-58.
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This paper reports on the evaluation of a writing program embedded within an intermediate macroeconomics course at an Australian university. This program was designed to address core issues identified by an academic literacies analysis of what might be called the higher education writing problem: an observed poor quality in the writing of higher education students across a range of disciplines. The program attempted to close an expectations gap between student and academic perceptions of what constitutes good writing by using clear and detailed assessment criteria, providing exemplars of good writing, and interacting with students about their writing in a series of writing workshops. Regressions of assignment results on a range of factors and a comparison of assignment results for students who attended the writing workshops versus those who did not, indicate a small but positive, and statistically significant, effect of important aspects of the writing program on assignment outcomes. A distributional effect was also observed whereby students at the pass-fail margin who attended the writing workshops performed better than those who did not. Limitations of the study are identified and suggestions are made for further work.
Docherty, P. 2009, 'RE-EXAMINING THE IMPLICATIONS OF THE NEW CONSENSUS: ENDOGENOUS MONEY AND TAYLOR RULES IN A SIMPLE NEOCLASSICAL MACRO MODEL', Metroeconomica, vol. 60, no. 3, pp. 495-524.
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Docherty, P.T. & Tse, H.P. 2009, 'A survey of AS-AD models for teaching undergraduates at intermediate level', Australasian Journal of Economics Education, vol. 6, no. 1, pp. 52-81.
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The Aggregate Supply-Aggregate Demand (AS-AD) model has been an important part of undergraduate teaching in economics for many years. It has, however, been the subject of recent criticism and new frameworks have been suggested to replace it. Given this antagonism, it seems a useful time to reflect on the AS-AD models suitability for teaching intermediate macroeconomics. A preliminary step in this process would be to provide a careful survey of AS-AD models used at this level. This paper surveys four common versions of the AS-AD model used in intermediate macroeconomics texts, considers the structure of these models, and carefully analyses their adjustment dynamics for negative demand and supply shocks. It argues that incorporating more than one of the approaches considered into intermediate classes would provide students with a better understanding of the state of economics and would enhance their critical skills by requiring them to understand the similarities and differences between the different approaches.
Docherty, P.T. & Tse, H.P. 2009, 'Re-evaluating the AS-AD model as a device for teaching intermediate macroeconomics', Australasian Journal of Economics Education, vol. 6, no. 2, pp. 64-86.
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In the previous issue of this journal, we provided a survey of AS-AD models used in intermediate macroeconomic textbooks. That exercise was seen as preliminary to a careful consideration of criticisms made of the AS-AD model that suggest it should cease to be used as a device for teaching intermediate macroeconomics. In this paper, we undertake this investigation and examine a range of problems that have been identified with the AS-AD model. We argue that that while a number of these criticisms are valid, they may be overcome in ways that leave the model largely intact as a device for teaching the neoclassical explanation of price-output determination. One of these ways involves a new interpretation the model. We do, however, point out two more fundamental criticisms of the AS-AD model that have not featured in the literature, and argue that acceptance of these criticisms would require replacement of the neoclassical paradigm itself. Until a decision to do this is taken by the profession, we argue that a revised AS-AD model has a continuing role to play in teaching intermediate macroeconomics.
Docherty, P.T. 2008, 'Basel II and the Political Economy of Banking', International Journal of Political Economy, vol. 37, no. 2, pp. 82-106.
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In January 2008, institutions across the G-lO countries responsible for regulating banks within their jurisdictions implemented the new Basel Capital Accord, now commonly known as Basel II. This new standard for bank regulation replaces the first Basel Accord adopted in 1988 and introduces several innovations designed to improve the effectiveness of bank regulation and to reduce the likelihood of large bank collapses and the associated possibility of financial instability. Such a new policy framework has important implications for welfare and interest rate policy. A framework that successfully reduces the occurrence of financial crises is also likely to reduce the number of damaging episodes of economic downturn (such as that recently observed in the United States as a result of the subprime crisis) 'and the frequency with which monetary policy needs to be called upon to repair the damage of such downturns. Because interest rates affect the distribution of income, these changes also have potential political economy implications.
Docherty, P. & Wang, G. 2006, 'Using Synthetic Data to Measure the Impact of RTGS on Systemic Risk in the Australian Payments System'.
This paper examines the possibility that financial contagion may be spread from one bank to another via the Australian payments system. The initial study of payments system risk was undertaken by Humphrey (1986) who found significant risk in the U.S. Fedwire system in the mid 1980s. Subsequent studies by Angelini, Maresca & Russo (1996), Kuussaari (1996), Northcott (2002) and Furfine (2003) have found, however, little evidence of systemic risk in the payments systems of Italy, Finland and Canada, and in the U.S. inter-bank market. Given that the implementation of real time gross settlement (RTGS) systems in many countries, including Australia, at significant cost, has been designed to reduce payments system risk, the finding that this risk is small is significant. While detailed payments system data for Australia is not available to researchers outside the Reserve Bank, this study constructs a synthetic data set based on available information and uses this data to simulate the failure of each financial institution operating in the Australian payments system. We find little evidence of systemic risk in the Australian payments system using this approach and conclude that the introduction of RTGS in the Australian system in 1996 had only a marginal effect on risk.
Docherty, P.T. 2006, 'Endogenous money, non-neutrality and interest-sensitivity in the theory of long period unemployment (F&E paper #148)', School of Finance & Economics Working Paper Series, vol. 148.
Docherty, P.T., Tse, H.P., Forman, S.R. & Menzies, G.D. 2006, 'Reducing the expectations gap: Facilitating improved student writing in an intermediate macroeconomics course (F&E paper #150)'.
Docherty, P.T. 1995, 'Endogeneity in Wicksell's monetary theory', History of Economics Review, vol. Winter, no. 23, pp. 20-36.

Other

Menzies, G., Pratt, J., Thorp, S. & Docherty, P. 2008, 'Piloting a Peer Feedback Program in the Faculty of Business at UTS'.
This paper outlines the trial and development of a peer review program for teaching improvement in the Faculty of Business at the University of Technology, Sydney (UTS). It first explores some of the key issues in the purpose and design of peer review schemes. It agrees with a strong theme in the peer review literature that peer review is most effective when used for quality enhancement rather than quality assurance in the sense used by Lomas and Nicholls (2005). It also recognises the possibility of resistance from academic staff to the idea of peer review and scepticism about its usefulness. A methodology for the conduct of a pilot peer review scheme is outlined drawing on the work of Bingham and Ottewill (2001) and Puget and Schubert (2008) in which peer review is voluntary, confidential and reciprocal involving a mutual arrangement with a trusted colleague to observe each other's teaching and to offer private constructive feedback within agreed parameters. The experience of participants in the pilot scheme is reported and observations made about both the process of peer review itself and of attempting to establish a peer review program in a Faculty not previously used to such methods of professional and educational development.