The failure of unregulated markets. [HT: Simon Johnson] MIT’s Daron Acemoglu has written one of the best essays on the financial crisis and what it means for economics that I have read. He argues, convincingly, that forgetting about what drives economic growth when formulating policy is a big mistake. Importantly, it has been all too easy to forget about how…
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OECD figures show 'flash flood' stimulus not working. The Federal Opposition says the latest report on the world economy by the OECD shows that the United States is the only country to have spent more than Australia on economic stimulus packages. [ABC News: Breaking Stories]
Tidal power divides the greens. One single project could provide an enormous boost to Britain's renewable energy problems. Engineers have long fantasized about harnessing all the energy from the river Servern--and with climate change and energy security now pressing political problems, ministers are beginning to take them seriously. [Environmental Health News]
Message to the Coalition: people respond to incentives. I was listening the other day to Tony Abbott claiming that the price elasticity of petrol is zero (Joshua Gans quotes the Coalition’s Greg Hunt making the same claim). It was perhaps the first time that I had heard a politician use the word ‘elasticity’, and it made me wonder whether Abbott…
The Victorian Government has released the Victorian Government Action Plan: Strengthening Community Organisations. A significant outcome is the establishment of the Office for the Community Sector at the Department of Planning and Community Development. It will be responsible for implementing the plan which addresses the streamlining of bureaucratic processes; workforce development in the community sector; and ongoing sustainability for community…
Means testing the baby bonus. I had vowed to not say another word on the baby bonus but the renewed speculation that something might be done has drawn me out. The talk now is of means testing it. As Andrew Leigh notes, this would have to be done with plenty of care but nonetheless would be a good step forward.…
Another good one from Andrew Leigh. As we draw near to budget time, there has been plenty of talk about what “middle Australia” will get. But where exactly is the middle? To provide a more precise sense, I’ve tabulated the pre-tax annual income distributions for individuals and households, in the 2008-09 tax year. My raw data is the 2006 HILDA…
COAG Communique released. The Council of Australian Governments (COAG) held its 20th meeting on 20 December 2007. In addition to the Prime Minister, Premiers, Chief Ministers and the President of the Australian Local Government Association (ALGA), Commonwealth and State and Territory Treasurers also attended. COAG agreed to a new model of cooperation underpinned by more effective working arrangements. COAG identified…
Structurally, this has been coming for a while and I can see some value in this if it is done correctly. There are dangers however, most notably in setting a price hurdle that will stop many from undertaking the very skills path they need because the risk/reward equation of deferred loans in this sector will be based on a lower…