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Analysis and Comment (70)

High-emission brown coal power generators including Hazelwood are set to be among the short-term winners from the carbon tax repeal. High-emission brown coal power generators including Hazelwood are set to be among the short-term winners from the carbon tax repeal. AAP Image/David Crosling

Who gains most from axing the carbon tax – and at what cost?

When the carbon tax was introduced, there was a lot of discussion about winners and losers. The Labor government limited the number of businesses that had to pay the tax, while it also gave carbon tax…
Rock star economists have been around for a long time, just like Jon Bon Jovi. Rock star economists have been around for a long time, just like Jon Bon Jovi. Umberto Rotundo/Flickr

Coming to an arena near you – economists, the new rock stars

Brian Cox, Mary Beard, Mick Aston, Niall Ferguson are all (just about) household names. They each have academic success – and their own television programs (“Wonders of the Solar System“, “Meet the Romans…
A new benchmark to measure the economic response to climate change. A new benchmark to measure the economic response to climate change. Mario Sánchez Prada

Bringing the long game into climate change economics

The UK government’s senior adviser on science has made an entirely sensible call for researchers and policy makers to move the climate change debate towards workable strategies and solutions. The trouble…
Less cash to spend on artisan olives? Less cash to spend on artisan olives? Dan Cunningham

How to stop the middle class getting poorer and poorer

Since the 1950s, with a few rare exceptions in the 1970s, the middle class – all over the world – has been getting worse off. Specifically, the middle class’ purchasing power, as with that of the working…
An IEA legacy on the stairs at 10 Downing Street? An IEA legacy on the stairs at 10 Downing Street? The Prime Minister's Office

How the free-market ideology of IEA has gained political ground

The Institute of Economic Affairs (IEA) is enjoying another moment in the sun. Australian politics is starting to move to the beat of its drum as Treasurer Joe Hockey talks about an “end to the age of…
Oxford’s dons need to get ready for some new thinking. Oxford’s dons need to get ready for some new thinking. lukecanvin

After the financial crisis, we need a new way to teach PPE

When it comes to debating the rights and wrongs of public policies, economists have always held a privileged position. While citizens and less respected social scientists must strive to get their voices…
No need to learn Bieb’s moves, just set up an instagram and watch the fans roll in. No need to learn Bieb’s moves, just set up an instagram and watch the fans roll in. Ricky Brigante

When looking like Justin Bieber is worse than dodgy stock trading

A couple of months ago my 13-year-old son came to me with a true story. One of his acquaintances had given him control of an Instagram profile with roughly 3,500 followers as a gift. A few days later…
How much green will it cost to go green? How much green will it cost to go green? epsos.de

IPCC report shows Stern inflated climate change costs

How much does climate change cost? What will be the impact on our wallets? The latest report from the Intergovernmental Panel on Climate Change’s (IPCC) Working Group II has concluded that global warming…
Fight or flight? Bankers likely to opt for the second. Fight or flight? Bankers likely to opt for the second. BK and EP

Fear of risk linked to high stress hormone in bankers

In times of financial uncertainty and crisis, high stress reactions lead to traders becoming more risk averse, which drives pessimism and further falls in finance, according to a new study. This is because…
Its about to rain pennies from heaven in Iceland. Its about to rain pennies from heaven in Iceland. Jokull Masson

Free cash for Iceland, but it pays to keep cool about Auroracoin

The Bitcoin craze has hit Iceland, where an entrepreneur has set up his own cryptocurrency and announced plans to give every citizen a handful for free. Baldur Odinsson says he is setting up a new cryptocurrency…
Fighting the laws of physics. Fighting the laws of physics. Dklimke

Cosmetic surgery boom not a sign of economic health

The number of cosmetic surgery operations in the UK hit 50,000 a year for the first time in 2013. This is worrying given that the Keogh review into the industry following the PIP scandal, which saw thousands…
Not at the races. Not at the races. Lefteris Pitarakis/AP

France’s economic sickness might defy a cure

The news from France has not been good over the last few years. Poor economic growth, stubbornly high unemployment, plant closures on the rise, strikes (not new, really), voter disenfranchisement and the…
All smiles: is this really the kind of society we want? All smiles: is this really the kind of society we want? zoomar

The happiness agenda makes for miserable policy

How happy do you feel today? How satisfied are you with your life? Do you think your life has any worth? These are the kind of questions increasingly put to survey respondents as academics and politicians…
Advert for a bus company, Tineghir, southern Morocco Advert for a bus company, Tineghir, southern Morocco Hein de Haas

Explainer: what makes people migrate?

Why do people migrate? At first glance it seems reasonable to assume that most people move hoping to find better conditions or opportunities elsewhere, such as jobs, higher wages, safety or freedom of…
People should not be hungry with the food, resources, and technology at our disposal. People should not be hungry with the food, resources, and technology at our disposal. PA

Staying alive shouldn’t depend on your purchasing power

How much would you pay for staying alive? How much would you pay for breathing pure air? That may seem a silly question since air is everywhere, accessible to all. Air is a global public good, part of…
Will the credit card cover this? Will the credit card cover this? ben_osteen

Time to stop inflating the household debt bubble

Household debt in the UK recently hit a record high, surpassing the previous peak reached in September 2008. That was the month when Lehman Brothers collapsed, sparking off the global financial crisis…
We’ve struck growth! We’ve struck growth! Joe Giddens/PA

Osborne’s growth strategy masks worrying undercurrents

The Autumn Statement is a curious ritual. With the chancellor already delivering an annual budget based around a medium-term strategy, the autumn statement does not provide an opportunity for any major…
Ross Garnaut’s Dog Days confronts the issues of productivity and tax reform, but is short on solutions. Ross Garnaut’s Dog Days confronts the issues of productivity and tax reform, but is short on solutions. Lukas Coch/AAP

Book review: Garnaut’s Dog Days

In 1991, Michael Pusey unleashed Economic Rationalism in Canberra: A Nation-building state changes its mind. In his book, Pusey took aim at the Canberra econocrats who ruled the key federal government…
This is economics, too. This is economics, too. Paul Faith/PA

Time to stop ignoring feminist economics

Economics has been heavily criticised for being unnecessarily complex, unresponsive to criticism, and unable to predict and respond to major financial crises. Recently, we have seen calls for a broader…
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…
Forgot your calculator? Forgot your calculator? Michael Probst/AP

Economics must reform, but data can’t tell us everything

In the five years since the collapse of Lehman Brothers, the discipline of economics has had an uncomfortable spotlight turned on its inner workings and assumptions. Movements such as Occupy have passionately…
Efficient or irrational? Efficient or irrational? BasicGov

Economics Nobel reveals three approaches to markets

This year, the Nobel prize in economics went to three researchers for their contributions to the field of empirical and theoretical finance. This is not the first time the committee has honoured work in…
Just don’t ask economists for the solution. Just don’t ask economists for the solution. Dominic Lipinski/PA

Economics Nobel must acknowledge the global financial crisis

The 2013 winners have now been announced. David Spencer responds in a postscript at the bottom of this article. What are economists for? Well, one obvious answer is to “do economics”, defined in the academic…
Bankers forgot how to be clever. Bankers forgot how to be clever. Scott Ableman

Banking report suggests a cure for stupidity epidemic

For a brief period of time in the 1980s, one of the biggest selling t-shirts carried a print of an arrow which simply said “I’m with stupid”. It pointed to the person next to the witty wearer. In the 1990s…
The Bank of England: still the key to growth? The Bank of England: still the key to growth? Yui Mok/PA

Ignore the calls for stimulus and stick with Plan A

Many critics of the coalition government’s “Plan A” argue that it should deviate from deficit reduction plans to instead stimulate growth via additional infrastructure spending. Recent advocates of this…
Treasurer Wayne Swan has unveiled an $19.4 billion deficit, but promises to be back in surplus by 2016-17. Treasurer Wayne Swan has unveiled an $19.4 billion deficit, but promises to be back in surplus by 2016-17. AAP

A long slide towards debt leads to Wayne’s budget swansong

How did the Australian economy, which boasts the best performance of the major advanced economies, end up with an estimated budget deficit of A$19 billion this year and an estimated debt of $178 billion…
Can economics really describe love? Well, it starts with greed… Can economics really describe love? Well, it starts with greed… Image sourced from www.shutterstock.com

Economics: what’s love got to do with it?

Economists understand greed very well; after all, the urge to get rich is our discipline’s main explanation for human actions. Economists further recognise that greed can be good. When our greedy urges…
Data and computer code should be made publicly available at an early stage – or else … Data and computer code should be made publicly available at an early stage – or else … esarastudillo

The Reinhart-Rogoff error – or how not to Excel at economics

Last week we learned a famous 2010 academic paper, relied on by political big-hitters to bolster arguments for austerity cuts, contained significant errors; and that those errors came down to misuse of…
An influential economics paper — which has now been shown to have several methodological flaws — was used by policymakers to justify austerity drives around the world. An influential economics paper — which has now been shown to have several methodological flaws — was used by policymakers to justify austerity drives around the world. AAP

Economists, an Excel error, and the misguided push for austerity

The economic literature is full of excellent articles that are not read outside small academic circles. There are, however, important exceptions. “Growth in a Time of Debt”, by Carmen R. Reinhart and Kenneth…
If there’s one thing we can say with certainty, it’s that economic forecasting is far from an exact science. If there’s one thing we can say with certainty, it’s that economic forecasting is far from an exact science. Image from www.shutterstock.com

When it comes to economic forecasting, it’s wise to admit to uncertainty

One certainty about economic forecasts is that, almost certainly, they will prove to be incorrect. The best forecasters can hope for is not to make systematic errors – to get it right on average – and…
The great stagnation: does faltering innovation spell the end for economic growth? The great stagnation: does faltering innovation spell the end for economic growth? Image from www.shutterstock.com

Fear the no-grow zone: has technological innovation reached its final frontier?

The economic profession lacks a unified theory of economic growth. Textbooks and academic journals contain a plethora of models and paradigms which generate different (and sometimes contradictory) predictions…
In a recently released report, IMF chief economist Olivier Blanchard admitted that implementing austerity in Europe was a mistake. In a recently released report, IMF chief economist Olivier Blanchard admitted that implementing austerity in Europe was a mistake. AAP

We were wrong: IMF report details the damage of austerity

In a rare volte-face, the International Monetary Fund this week admitted that it grossly underestimated the impact of the austerity regime it advised Europeans to adopt. A paper authored by IMF chief economist…
College day betting lead to a fascination with the stockmarket for this physicist. College day betting lead to a fascination with the stockmarket for this physicist. Dan Raustadt Flikr

A rocket scientist’s view of the stockmarket

The last Space Shuttle recently returned to Earth. That reminded me that 45 years ago I was undertaking a PhD in physics at Australian National University, investigating the re-entry of the space shuttle…
Stanford University’s Alvin Roth (pictured) and UCLA’s Lloyd Shapley were given the Nobel prize “for the theory of stable allocations and the practice of market design”. Stanford University’s Alvin Roth (pictured) and UCLA’s Lloyd Shapley were given the Nobel prize “for the theory of stable allocations and the practice of market design”. AAP

Match-making economists earn Nobel prize for economic engineering

The Nobel prize for economics is often awarded for relatively abstract theoretical work. Rather less often, it is awarded for work with clear practical relevance. This year, the committee responsible for…
Beyond charity: philanthropists want a stake in giving. Beyond charity: philanthropists want a stake in giving. Broken Simulacra / flickr.com

Is ‘philanthrocapitalism’ the future of Australian charities?

The collapse of the child-care business ABC Learning in 2010 was an extraordinary chapter in Australian corporate history. Colourful Queensland businessman Eddy Groves, built the world’s largest publicly…
If the government is serious about maintaining its economic prosperity into the future, it needs to address Australia’s historically poor productivity growth. If the government is serious about maintaining its economic prosperity into the future, it needs to address Australia’s historically poor productivity growth. Ann Douglas

Australia’s productivity problem: why it matters

The majority of Australians would prefer higher living standards. This can take the form of better access to better healthcare services and education, better environmental outcomes, more time for friends…
Campbell Newman’s linking of Queensland’s dire financial situation with that of Spain saw quite a backlash, but is there an underlying element of truth? Campbell Newman’s linking of Queensland’s dire financial situation with that of Spain saw quite a backlash, but is there an underlying element of truth? AAP

Perfect one day, bankrupt the next? Queensland’s missing fortune

Comments by Campbell Newman that Queensland was on the way to bankruptcy are, unfortunately, true. His comment that “Queensland does not have the money…” is globally true - but clearly specifically arguable…
Former politician and economist John Hewson speaks to ANU’s Crawford School’s Bruce Chapman and Daniel Connell. Former politician and economist John Hewson speaks to ANU’s Crawford School’s Bruce Chapman and Daniel Connell.

John Hewson: tax reform doesn’t just mean lowering taxes

Welcome to the latest in our In Conversation series, between former politician and economist Dr John Hewson, Australian National University (ANU) Crawford School Director of Policy Impact Professor Bruce…
Liam Lenten explains why the government spends your money on sport. Liam Lenten explains why the government spends your money on sport.

Why do governments fund sports? (VIDEO)

Welcome to Some Sports Economics, a six-part video series explaining economic concepts through sport, by La Trobe University senior lecturer, Liam Lenten. In the sixth and final part of this series, Liam…
Welcome to Part four of Liam Lenten’s Some Sports Economics. Welcome to Part four of Liam Lenten’s Some Sports Economics.

The economics of comparative advantage and Usain Bolt (VIDEO)

Welcome to Some Sports Economics, a six-part video series explaining economic concepts through sport, by La Trobe University senior lecturer, Liam Lenten. In the fourth part of this series, Liam explains…
Liam Lenten presents Some Sports Economics, a six-part video which uses sporting analogies to explain common economic concepts. Liam Lenten presents Some Sports Economics, a six-part video which uses sporting analogies to explain common economic concepts. YouTube

When scoring an own-goal is the only way to win (VIDEO)

Welcome to Some Sports Economics, a six-part video series explaining economic concepts through sport, by La Trobe University senior lecturer, Liam Lenten. Liam says: “I am motivated to better explain basic…
International organisation 350.org encourages the building of grass-roots movements to combat climate change. International organisation 350.org encourages the building of grass-roots movements to combat climate change. 350.org

Building the new economy: alternative strategies for the 99%

Bob Massie, CEO of the New Economics Institute opened the recent Strategies for a New Economy conference, held at Bard College, New York with a thoughtful response to the criticism that the Occupy movement…
Robert F Kennedy thought it a mistake to equate success with what we produce. Robert F Kennedy thought it a mistake to equate success with what we produce. RFK Wharehouse

There’s more to good policy than increasing GDP

Economists are regularly criticised for worrying about gross domestic product (GDP) and similar measures. The classic statement of the case was by Robert F Kennedy: “Too much and too long, we seem to have…
Elinor Ostrom, the only woman to have won a Nobel prize for economics, was most famous for challenging the idea of the “tragedy of the commons”: that in the absence of government intervention, people will overuse shared resources. Elinor Ostrom, the only woman to have won a Nobel prize for economics, was most famous for challenging the idea of the “tragedy of the commons”: that in the absence of government intervention, people will overuse shared resources. acschweigert

The grand philosopher of the Commons: in memory of Elinor Ostrom

The grand philosopher of the Commons, Elinor Ostrom, passed away on the 12th June 2012. She was a brilliant, creative polymath; a theoretician of fine precision and great intellectual power; a deviser…
If Australia had been founded according to the Eurozone model, our current economic situation would look very different. If Australia had been founded according to the Eurozone model, our current economic situation would look very different. adam79

Australia and the Eurozone: a counterfactual account of economic history

Suppose that in 1901 Australia’s founding fathers had designed the Commonwealth differently. The states were to retain all powers to tax and had to finance themselves (including health, education and social…
With natural gas - like other commodities - it can be necessary for prices to rise in anticipation of increasing demand. With natural gas - like other commodities - it can be necessary for prices to rise in anticipation of increasing demand. Flickr/jasonwoodhead23

Natural gas: expect price to rise as market expands

Many are concerned with the price of natural gas. Natural gas is an important part of Australia’s overall energy mix; it represents roughly a quarter of all primary energy sources consumed. And, as we…
UN Secretary-General Ban Ki-moon, Bhutanese Prime Minister Jigmi Thinley, Costa Rican President Laura Chinchilla and administrator of the UN Development Program, Helen Clark at last week’s UN meeting on wellbeing and happiness. UN Secretary-General Ban Ki-moon, Bhutanese Prime Minister Jigmi Thinley, Costa Rican President Laura Chinchilla and administrator of the UN Development Program, Helen Clark at last week’s UN meeting on wellbeing and happiness. Casa Presidencial República de Costa Rica

Wellbeing, happiness and sustainability: hallmarks of a new economic paradigm

What do the following people have in common? Nobel laureate economist Joseph Stiglitz, former Australian deputy prime minister Tim Fischer, UN Secretary-General Ban Ki-moon, HRH Prince Charles, OECD chief…
In times of financial collapses, banks and governments are painted as the villains. But what about economists? In times of financial collapses, banks and governments are painted as the villains. But what about economists? ~ dgies

Time to stop rewarding economists for bad behaviour

Since the beginning of the global financial crises in 2007, there have occurred numerous economic and financial crises around the globe, plunging often prosperous nations into hardship and even near bankruptcy…
What would Marx (left) and Engels say about capitalism’s current predicament? What would Marx (left) and Engels say about capitalism’s current predicament? Marcio Cabral de Moura

Marxism versus the mainstream: rethinking the economic crisis

The current economic crisis has renewed interest in alternative economic ideas. Most conspicuously, Keynesianism has returned from the margins. Unfortunately, particularly in Europe, policymakers quickly…
A life without money isn’t pie in the sky any more. A life without money isn’t pie in the sky any more. truthout.org

Occupy a money-free world? Now that’s a capital idea

When New York’s Mayor Michael Bloomberg ordered police to clear Zuccotti Park of Occupy protestors on 15 November last year he called on the protesters to “occupy the space with the power of their arguments…
Despite President Barack Obama’s charms, Australia must focus on China. Despite President Barack Obama’s charms, Australia must focus on China. AAP Image/ Scott Barbour

The US or China? Australia can’t afford to make mistakes

Australia’s recent fleeting love affair with President Barack Obama notwithstanding, Australia’s future lies with China and the North, not the Pacific and the East. This is not simply a matter of economics…
Nobel Prize in Economics winners Christopher Sims and Thomas Sargent: in the neoclassic mold. Nobel Prize in Economics winners Christopher Sims and Thomas Sargent: in the neoclassic mold. AAP

Why does neoclassical thinking still dominate economics?

The Sveriges Riksbank’s Prize in Economic Sciences - or the Nobel prize in economics - awarded last week to Thomas Sargent and Christopher Sims- implicitly claims that economics is a science. But how accurate…
Australia will have to try something new, and align itself more closely to Asia. Australia will have to try something new, and align itself more closely to Asia. AAP Image/Adam Gartrell

Is Australia ready for the ‘Asian century?’

AUSTRALIA IN ASIA: In the first of The Conversation’s series on Australia’s relations with Asia, Professor Tony Milner of the Australian National University examines whether we are prepared for the “Asian…
Big sporting events often make a loss, but the locals still enjoy the party. Big sporting events often make a loss, but the locals still enjoy the party. AFP/Franck Fife

What will the Rugby World Cup be worth to New Zealand?

RUGBY WORLD CUP – In the latest of The Conversation’s series on the Rugby World Cup, Massey University’s Sam Richardson looks at the costs and benefits to the host country New Zealand. New Zealand has…
Planting the idea: Opposition Leader Tony Abbott opposes a carbon tax. Planting the idea: Opposition Leader Tony Abbott opposes a carbon tax. AAP Image/Julian Smith

Australia should delay a carbon tax until the rest of the world acts

The big question about the carbon tax is not whether it’s a good or a bad idea in theory. The major issue is whether it makes sense for Australia to implement it at a time of great uncertainty, both in…
Stock markets around the world plummeted after news of the US credit rating downgrade (EPA/FRANK RUMPENHORST) Stock markets around the world plummeted after news of the US credit rating downgrade (EPA/FRANK RUMPENHORST)

Debt dive: why is the US at the mercy of anonymous credit agencies?

Without the firing of a single shot in anger, a country has been, at least in a sense, brought to its economic knees. The capitalist system, with variations and aberrations, is now reacting. Shares are…
Concerns have been raised over the levels of foreign investment in Australia, including in the mining sector AAP. Concerns have been raised over the levels of foreign investment in Australia, including in the mining sector AAP.

Should foreign investment rules be reviewed?

The purchase of 43 farms in northern NSW by a state-controlled Chinese mining company has prompted calls this week for tougher restrictions on foreign investment. Greens leader Bob Brown, independent Senator…
A carbon tax priced at $26 per tonne could raise $11.5 billion in the first year, said economist Ross Garnaut. A carbon tax priced at $26 per tonne could raise $11.5 billion in the first year, said economist Ross Garnaut. AAP

Final Garnaut climate change review: the experts respond

Economist Professor Ross Garnaut has released his final report to the government on climate change and the economy. The report says global warming is expected to continue and estimates that a $26 per tonne…

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