Free emotions come with a price tag

At times such as the Martin Place siege and its tragic aftermath, it doesn't help to have been trained to think like an economist, to analyse the situation as coolly and rationally as possible, keeping your emotions in check. I feel like I'm from Mars, while everyone else is from Venus. Nor does it help to be among those who respond to such events as part of their job. Inevitably, the police, security agencies, politicians...

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Materialist era a qualified success

Tired of obsessing over what happened in the economy yesterday? Let's go to the other extreme and look at what's been happening in the past 200 years, and broaden the focus from poor, ailing Australia to the world. In October, the Organisation for Economic Co-operation and Development published a report, How Was Life? Global Well-Being Since 1820. It's an extension of the work of great economic historian Angus Maddison. His ...

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Greenery has magic properties

I've just got to get through extended Christmas festivities - and subsequent mopping up - and I'll be off on my hols. What am I doing this year? Same as most years: heading for the bush. This time, we're going to the mountains. As a denizen of the inner city, I've long had a great desire to get out into the country whenever possible. Get into the grass and trees, where the air is clean and the sleeping seems better. There's ...

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Midyear forecasts do add up - sort of

Did you catch the apparent contradiction in this week's mid-year budget update? It left unchanged the forecast that the economy would grow by 2.5 per cent this financial year, but then blamed a weaker-than-expected economy for most of the $10 billion blowout in the expected budget deficit. How on earth is that explained? By a widening gap between real gross domestic product and nominal GDP. We tend to focus on the growth...

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There has to be more to our future than the budget

The end of last year was too early to make judgments about Tony Abbott and his government, but by now we can make a reasonable assessment. And it's hardly a favourable one, even by those who couldn't wait to see the back of infighting Labor. But though it's easy to bang on about the Abbott government's failings, I'm beginning to think it's too easy. Maybe our politicians are an uninspiring lot because their citizens aren't...

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Hockey reacts wisely to budget deficit blowout

The news from the mid-year budget review isn't as bad as it might seem. And I give Joe Hockey high marks for his wise response to it. Despite any contrary impression the denizens of Canberra might have left you with, the budget is not the economy. The economy, in which you and I live, work and spend, is much bigger and more important than Hockey's budget. The $10 billion blowout in the expected budget deficit for this financial...

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How the medical research fund is a trick

As an accountant turned journo, I try to ensure the creative accounting used to make the budget figures look better than they really are doesn't go unexposed. But I've never seen a con as audacious as the proposed medical research future fund. I wrote at length about all the accounting tricks perpetrated by the Gillard government, but now it's the Abbott government's turn. In their budget update during last year's election...

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Widening income gap slows economic growth

One of the most significant developments in applied economics in recent times is something we've heard little about in Australia, where we seem to be living in our own little cocoon, oblivious to advances in the rest of the world. For decades, economic policy in Australia - and most other developed countries - has been based on the assumption that there's a trade-off between economic efficiency and fairness (or "equity"...

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Growing signs young won't do as well as their olds

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Economy: not good, but not disastrous

Don't drop your bundle. It's not clear the economy has slowed to the snail's pace a literal reading of the latest national accounts suggests. As for the talk of a "technical income recession", it's just silly. What is clear is that, at best, the economy continues to grow at the sub-par rate of about 2.5 per cent a year, a rate insufficient to stop unemployment continuing to edge up. This has been true for more than two ...

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Why we're doing so much better on recessions

With the economy growing below par and spirits so flat that people have started making up new and silly terms like "technical income recession" just to spook us, it's time we put our present discontents into context. And who better to provide it than the unfairly sacked secretary to the Treasury, Dr Martin Parkinson, who on Friday gave the last of his final speeches in a farewell tour equal to Johnny Farnham's (though well...

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