To what do we owe the Industrial Revolution?

One of the small pleasures of my year was watching the deft political manoeuvrings of Thomas Cromwell in the TV miniseries of Hilary Mantel's Wolf Hall. Of course, this has nothing to do with the economy – or does it? I've just been reading a paper by three economic historians, Monks, Gents and Industrialists, arguing that an important reason why the Industrial Revolution of the late 18th century began in England, and in particular...

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How to get more enjoyment from the time available

I don't know about you, but it's at this time of year, when the Christmas rush is over and things slow down – even for those who are "working through" – that I get a bit more philosophical, a bit more reflective. What exactly did I achieve last year? Is next year going to be all that different? What's the point of working so hard? How can I find a better balance between work and play? To tell you the truth, I'm divided between...

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We're on the way to peak everything

Some economists worry the world economy isn't growing fast enough. It's slowing down and reaching the point of "secular stagnation". On a very different wavelength, however, environmentalists worry that if the world economy keeps growing the way it is, it won't be long before we run out of the natural resources on which that growth depends. Whoops. But if all that's a bit heavy for the holiday season, here's something lighter....

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Why I wish we'd had our credit rating downgrade this week

You can tell by when a government releases its midyear budget update how well it's going with the budget. If it's doing well, it publishes as early in December as possible. If it's doing badly, it publishes as close to Christmas as it thinks it can get away with, when normal people are busy with parties and preparations and not paying much attention. This year we got the update just six sleeps before Santa's arrival. Draw your...

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Party blame-laying conceals budget truths

Don't believe anything any politician on either side says about the mid-year budget update and the expected further deterioration in the budget deficit it reveals. And don't let speculation about whether the government will or won't lose its AAA credit rating worry you. These days, our credit rating is little more than something for the politicians to use to slag each other off. Its economic significance is long gone. According...

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Mining makes pollies confused about demand and supply

Since almost all of us have lived in a market economy all our lives, you'd expect the effects of supply and demand on price would be well understood, particularly by anyone who managed to get themselves into Parliament. In fact, however, our politicians on both sides have terrible trouble working out how supply works. Sometimes they tell us increasing supply will put downward pressure on price and sometimes they tell us it won't. Turns...

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What's happening in the labour market

Oh, no! They say the Bureau of Statistics' jobs figures for November are good because they show employment growing by 39,000, with all those jobs full-time. But then they say the unemployment rate increased a click to 5.7 per cent. Huh? It is possible to make sense of what's happening in the labour market, but only if you follow a few rules. For a start, it's never possible to make sense of the monthly figures if you focus...

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Experts agree emissions intensity scheme the way to go

If ever there was proof that modern-day politicians are more followers than leaders, Malcolm Turnbull must be it. Last week, under pressure from the Coalition's climate change-denying rump, he dropped the ball on global warming. He inherited from Tony Abbott a commitment under the Paris agreement to reduce our carbon emissions by 28 per cent below 2005 levels by 2030, plus a plan for a review in 2017 to determine what policies...

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Politicised Treasury bites own tail, covers for Turnbull

Shadow treasurer Chris Bowen is right: One of the Abbott-Turnbull government's various acts of economic vandalism is its politicisation of the once-proud federal Treasury. Among Tony Abbott's first acts upon becoming prime minister in 2013 was to sack the secretary to Treasury, Dr Martin Parkinson. Even so, Parkinson was left in place for more than a year before being replaced by John Fraser, a retired funds manager, hand-picked...

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How to tell if recession looms

What would economic race-calling be without its little excitements? As you may possibly have heard, this week's news is that the economy has contracted - shrunk, gone backwards - by 0.5 per cent. Oh, no! Another negative quarter will see the economy lapse into "technical" recession. Technically true, but quite unlikely - as almost all the money market economists had the honesty to admit. If you're more practical than technical,...

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Why I'm a pathological optimist, in spite of my job

Last week in front of 1400 people at a Fairfax Media subscriber event I was outed as a "pathological optimist" by an anonymous reader, who wanted to know how I got that way. It reminded me of Dylan Thomas, who went into a pub in America and got beaten up by some big bruiser – a future Trump voter, no doubt – for calling him heterosexual. But, since you ask, I'll tell you – much as I hate talking about myself. I think it's...

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Education efficiency should start with Grattan compromise

If Treasury wants to start acting more like economists than accountants, a good place to start would be to urge its political masters to seize on the opportunity presented by the school funding "compact" proposed by the Grattan Institute. Treasury advice would be much improved if it switched its approach to the budget from helping the politicians cook up some quick cuts to government spending to a more medium-term focus on achieving...

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Many guesses why productivity may have stopped improving

Conventional economics is falling apart, no longer making the sense we thought it made. Economists are entering a period of puzzlement and uncertainty, while their high priests struggle to hold the show together. You can tell all that if you read between the lines of the Productivity Commission's discussion paper launching its inquiry into Increasing Australia's future prosperity, published last month. It’s meant to be the...

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OVERVIEW OF THE AUSTRALIAN ECONOMY

Talk to Economics Teachers Association of WA, Perth, Friday, December 2, 2016The theme for your conference, Economic Cycles - Riding the Waves, is particularly well chosen. At a time when Western Australia is well and truly in the downswing of its cycle, the national economy is celebrating have completed 25 years of continuous growth, a record for our economy and something no other developed economy has achieved in the same period....

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