The advent of "stagflation" in the 1970s - the previously unknown combination of high inflation with high unemployment - led to a loss of confidence in Keynesian policies, with primary responsibility for management of the macro economy being shifted to monetary policy and with fiscal policy taking a lesser role.
Four decades later, the wheel may be turning again. The two hot stories in the world of macro management are the...
Saturday, March 14, 2015
Wednesday, March 11, 2015
Tears for first-home buyers the crocodile kind
Joe Hockey wants to help young people buy their first home by letting them dip into their superannuation, while NSW Labor leader Luke Foley wants to improve affordability by letting them pay off the stamp duty on their purchase over five years. Really? I often wonder whether our politicians are knaves or just fools.
But while we're questioning the sense and morality of our pollies, we shouldn't neglect to ask whether they're...
Monday, March 9, 2015
Econocrats doubt our ability to grow
So, how fast can we expect the economy to grow over the next 40 years? And, more to the point, where's that growth supposed to come from? That's a doubt you expect from people without the benefit of an economics education, but the intergenerational report reveals the econocrats are going through a crisis of confidence about growth.
First, a disclaimer: not being as materialist as the economists, I don't see maximising our...
Saturday, March 7, 2015
More infrastructure spending would boost economy
It's good to see Joe Hockey finally making the transition to government and joining the economic optimists' party. This week he greeted the national accounts by saying the economy had grown by "a solid 0.5 per cent in the December quarter to be 2.5 per cent higher over the past year".
"Our income as a nation picked up in the quarter, with nominal gross domestic product rising by a solid 0.6 per cent," he continued. "Real...
Friday, March 6, 2015
Intergenerational report a disappointment
The five-yearly intergenerational report ought to be highly informative, leading to serious debate about the economic choices we face. In the hands of Joe Hockey, however, it has become little more than a crude propaganda exercise.
As such it will be quickly cast aside, like last year's report of the Commission of Audit. Within a few days all that will remain is the taxpayer-funded advertising campaign. It, too, will be more...
Wednesday, March 4, 2015
Cities: jobs in the centre, most people on the outer
It's remarkable how few new ideas most economists get. They look at the world the way they always have and worry about the same things they've always worried about, chasing the same rabbits down the same burrows.
They analyse the world using their standard model and see those things the model is designed to highlight, but don't see anything that's outside its scope.
What most economists rarely think about is the spatial dimension...
Monday, March 2, 2015
Treasury under new management
How much does the Treasury's view of the world change when a prime minister comes to power, sacks the head of Treasury (and his heir apparent) and replaces him with his own hand-picked man from outside the public service?
That's what the economic cognoscenti were asking last week when our first political appointment as Treasury secretary, John Fraser, made his first public appearances at a Senate estimates hearing and...
Saturday, February 28, 2015
Why a 10-year census would be fine
What's the difference between a census – a full count – and a sample survey? The census will always be superior, right? Not really.
With talk that the Bureau of Statistics and the government are considering changing our census of population and housing from five-yearly to 10-yearly and making up for this with regular sample surveys, the difference between the two has suddenly become a question of interest to more...
Wednesday, February 25, 2015
Raising mothers' job participation only half the story
I'm not sure how many barbecues it's stopping these days, but the issue you and I call childcare and the politically cool call ECEC - early childhood education and care - is still one of great concern to experts ranging from hard-headed economists to soft-hearted social workers, not to mention the odd parent.
From a narrowly economic perspective, childcare matters because any problems with it limit women's participation in...
Monday, February 23, 2015
One bad budget doesn’t kill all reform
If Tony Abbott and Joe Hockey fail to keep their jobs, and the more so if their successors fail to pull the government out of its dive, the 2014 budget will go down as the most fateful budget in Australia's history, worse even than Artie Fadden's original horror budget of 1951.
Should Abbott's prime ministership or his first-term government come to an early end, all the denizens of the House with the Flag on Top will conclude...
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