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Analysis and Comment (24)

Rates should stay steady for now, say CAMA economists. Rates should stay steady for now, say CAMA economists. Dan Peled/AAP

Call likely to grow louder for interest rates to rise

The CAMA RBA Shadow Board is a project by the Centre for Applied Macroeconomic Analysis, based at the ANU, which asks industry and academic economists what interest rate the Reserve Bank of Australia should…
Consumer sentiment has fallen since the federal budget while other indicators suggest the economy is in limbo. Consumer sentiment has fallen since the federal budget while other indicators suggest the economy is in limbo. AAP/Dan Himbrechts

Rates should hold until post-budget malaise clears

The CAMA RBA Shadow Board is a project by the Centre for Applied Macroeconomic Analysis, based at the ANU, which asks industry and academic economists what interest rate the Reserve Bank of Australia should…
The economy will react slowly to last night’s budget. The economy will react slowly to last night’s budget. AAP/Lukas Coch

How will the economy react to the budget?

The Abbott-Hockey government is continuing to budget for a deficit. This means it is pumping more spending into the economy than it is taking out. The amount of this stimulus is being reduced; the size…
Special Economic Zones such as Shenzhen provided the policy basis for Chinese growth. Special Economic Zones such as Shenzhen provided the policy basis for Chinese growth. AAP

Looking past doomsday rhetoric: China’s free trade zones

As markets commence the new year in a sense of panic on the back of an uncertain outlook for China’s economy, I am brought back to a bookshop discovery I made in 2001 and the pending doom and gloom which…
ASIC warns: forex currency trading requires a high degree of skill, and consumers should be aware of the risks and potential for loss. ASIC warns: forex currency trading requires a high degree of skill, and consumers should be aware of the risks and potential for loss. Image of finance chart with sell/buy dice from www.shutterstock.com

Gambling on the dollar: time to reign in forex trading

With the value of the Australian dollar falling more than 10 cents in the past few months, should we all be hedging our bets and trading the Aussie for a fast profit? There’s no shortage of foreign currency…
Debt; dollar; deficit - the mantra for this year, amid a turbulent political period. Debt; dollar; deficit - the mantra for this year, amid a turbulent political period. AAP

2013, the year that was: Business and Economy

Debt. Dollar. Deficits. Three little words so close to the hearts of our contributors in a year dominated by a critical federal election, a waning mining boom and continuing international turbulence. The…
Outgoing US Federal Reserve chairman Ben Bernanke is cautiously pulling back the Fed’s quantitative easing program. Outgoing US Federal Reserve chairman Ben Bernanke is cautiously pulling back the Fed’s quantitative easing program. AAP

Explainer: What US Fed tapering means for markets

The US Federal Reserve has announced that after more than five years of support, the “tapering” of its quantitative easing program is to begin. So what will the consequences of the gradual withdrawal of…
Floating the Australian dollar helped us flourish - but was no panacea to all economic ills. Floating the Australian dollar helped us flourish - but was no panacea to all economic ills. Image sourced from www.shutterstock.com

The float Australia had to have?

The Australian dollar was floated this day in 1983. By 1985, it seemed to take on water, list badly, and sink. And that actually was the idea. The real exchange rate – roughly, the dollar rate, adjusted…
Can - and should - the RBA intervene to lower the Australian dollar? Can - and should - the RBA intervene to lower the Australian dollar? Image sourced from www.shutterstock.com

Intervene or wait? The RBA faces tricky path to a lower dollar

Reserve Bank Governor Glenn Stevens has again weighed in on the value of the Australian dollar, telling a group of economists the bank is open to the idea of intervening to bring its value down. With the…
The Australian dollar has lost its dazzle as the US economy steadily improves. The Australian dollar has lost its dazzle as the US economy steadily improves. Image from www.shutterstock.com

Making cents of a falling Australian dollar

After weeks of rapid depreciation, many commentators are wondering just how low can the Australian dollar go. Slowing growth in China and signs of a recovery in the US have renewed pressure on the dollar…
Global markets have experienced sharp sell-down off fears of a wind-down in US quantitative easing. Global markets have experienced sharp sell-down off fears of a wind-down in US quantitative easing. AAP

Reasons why we should expect a lower Australian dollar

The response to US Federal Reserve Ben Bernanke’s comments about the possibility of ending its policy of quantitatitive easing has helped evoke a global sell-off as markets question his upbeat assessment…
Our fruit industry is struggling against cheap imports - but should we be doing more to protect our “food bowl to Asia”? Our fruit industry is struggling against cheap imports - but should we be doing more to protect our “food bowl to Asia”? AAP

Are we allowing our fruit industry to wither?

The sight of Victorian fruit farmers bulldozing surplus trees due to the loss of supply contracts is a dramatic way to illustrate the quandary facing both Australian industry and growers. In April Victorian…
The federal government’s Farm Finance package includes concessional loans to help farmers restructure and improve productivity - but carries the risk of heaping them with more debt. The federal government’s Farm Finance package includes concessional loans to help farmers restructure and improve productivity - but carries the risk of heaping them with more debt.

Farm Finance package is flawed - and there is a better option

The Federal Government’s new Farm Finance assistance package includes concessional loans to help farms restructure debt and invest in productivity. But this is a back-to-the-future response that carries…
The Australian dollar’s rally in response to more expansive monetary policy from Japan isn’t likely to last, as Japan wrestles with domestic and political reforms. The Australian dollar’s rally in response to more expansive monetary policy from Japan isn’t likely to last, as Japan wrestles with domestic and political reforms.

Why the Australian dollar’s rise against the yen won’t last

The coordinated policies of the Bank of Japan and the Japanese government in increasing money supply has had some interesting short-term implications for the Australian dollar. Since the Bank of Japan…
Some commentators have suggested that the RBA should intervene in currency markets to tame the Australian dollar. But is this a wise move? Some commentators have suggested that the RBA should intervene in currency markets to tame the Australian dollar. But is this a wise move? betta design

Should the RBA act on the high Australian dollar? Experts respond

As foreign central banks continue to park their money in our triple-A rated bonds, the Australian dollar continues its inevitable ascent. The dollar traded as high as US106.03¢ after the RBA left the interest…
Pay it down - Treasurer Wayne Swan goes through his now-usual exhortation to banks to pass on today’s Reserve Bank 25 basis point rate cut in full. Pay it down - Treasurer Wayne Swan goes through his now-usual exhortation to banks to pass on today’s Reserve Bank 25 basis point rate cut in full. AAP

Reserve Bank cuts rate to 3.5% - experts respond

Amid the tumultuous economic climate in the US and Europe - not to mention the tumbling fortunes of our sharemarket - the Reserve Bank of Australia has followed market sentiment and cut the official cash…
The Australian dollar has dropped to its lowest level in six months amid continuing global uncertainty: but does it remain over-valued? The Australian dollar has dropped to its lowest level in six months amid continuing global uncertainty: but does it remain over-valued? AAP

Australian dollar continues to drop; but is there more to come?

The Australian dollar has dropped to a six month low on continuing fears over a Greek exit from the Eurozone, despite pleas from European Union leaders. Head of discipline, Economics and Winthrop Professor…
Associated with sexy, outdoor aesthetic, Australia’s surfboard culture defines a way of life. But it is in danger of disappearing? Associated with sexy, outdoor aesthetic, Australia’s surfboard culture defines a way of life. But it is in danger of disappearing? Flickr/Desobry23

Once a cultural icon, is Australia’s surfboard industry destined to disappear?

Last October surfboard company BASE abruptly closed its factory on the Gold Coast, with the direct loss of 30 jobs. Since then, nearby D’Arcy Surfboards has announced it is shedding workers and downsizing…
Fears over Greece saw the Australian dollar dip under parity for the first time since December. Fears over Greece saw the Australian dollar dip under parity for the first time since December. AAP

Explainer: some respite for exporters and tourism as dollar dips below parity

The Australian dollar has touched below parity with the US dollar for the first time since December last year. This will no doubt disappoint the long line of Australian citizens touring the world, firms…
Australia’s mining boom is both a boon and a bane to our economic development. Australia’s mining boom is both a boon and a bane to our economic development.

Managing the mighty structural forces unleashed by the mining boom

Australia’s stark comparative advantage in mining is both a boon and a bane to our economic development. Investment in the mining industry as a share of Australia’s GDP has already reached unprecedented…
Can greater use of a sovereign wealth fund help share the revenue from the mining boom for future generations? Can greater use of a sovereign wealth fund help share the revenue from the mining boom for future generations? AAP

Future Funds or Future Eaters? The case against a Sovereign Wealth Fund for Australia

There has been growing debate as to whether Australia should make greater use of Australia’s sovereign wealth fund, the Future Fund, to manage fluctuations in the federal budget balance due to commodity…
The automotive industry is bearing the brunt of a strong Australian dollar. The automotive industry is bearing the brunt of a strong Australian dollar. AAP

Death by the dollar? How innovation can save manufacturing

Toyota’s announcement yesterday that it will shed 350 jobs at its plant in Altona has been blamed on the strength of the Australian dollar, which some commentators say is having a significant impact on…
Manufacturers may be forced to accept profit margins will continue to narrow. Manufacturers may be forced to accept profit margins will continue to narrow.

Explainer: What a strong Australian dollar actually means

The Australian dollar has been striking new post-float highs against the US dollar in recent weeks, and according to a number of prominent market economists could reach US$1.10 before the end of this year…

Research and News (1)