I did a livestream earlier today (Friday 3 December 2021) with my regular co-host Tim Hughes on the latest economic news of the week, including the latest US initial jobless claims confirming a strong US economy, the impact of the omicron COVID-variant on equity markets, and the September quarter Australian GDP figures which revealed the adverse impacts of NSW and Victorian lockdowns. You can click on and watch the video on YouTube below. You can also download the slides I showed.
In the livestream, from around 22:05, I reflected on the late Professor Tony Makin’s contributions to the Australian economic policy debate, particularly on whether we should worry about the current account deficit in the late 80s/early 90s and on the effectiveness of the Rudd Government’s fiscal stimulus. On the current account deficit, Tony’s articles, along with the contributions of John Pitchford, clearly led to a change in the policy consensus on the current account, so it was no longer something that would be a macroeconomic policy target. Sadly, Tony died unexpectedly earlier this week. This came as a huge shock to so many of us, and it’s obvious from all the conversations I’ve had about Tony over the last few days just how much respect and admiration his colleagues and former students had for him. Tony’s funeral is on Monday on the Gold Coast (see notice below).
Economics Explored host Gene Tunny’s latest Friday livestream for 22 October 2021 covered:
accelerating NZ inflation and the implications for interest rates of accelerating inflation in advanced economies more broadly;
the great Australian reopening and booming job vacancies (i.e. as noted by the National Skills Commission “Nationally job advertisements are up by 36.2% (or 60,800 job advertisements) compared to levels observed prior to the pandemic”); and
the extraordinary Bitcoin narrative which is being reinforced by the introduction of Bitcoin-exposed Exchange Traded Funds.
You can download Michael Knox’s excellent note on the oil price which was mentioned in the livestream here:
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Economics Explored Live for 15 October 2021, the first edition of what I’m planning to be a weekly livestream, covered:
the growing concern internationally about accelerating inflation, prompted by the latest US CPI figures (see chart below;
the September ABS Labour Force data revealing big drops in hours worked and workforce participation in the locked-down economies of NSW and Victoria; and
my state of Queensland’s relatively low vaccination rate (72% for 1st dose vs 84% nationally) and what it could mean for the state’s reopening and the economy – it’s pretty obvious the Queensland Premier should set a date for re-opening ASAP to encourage people to get vaccinated promptly, as suggested by the Queensland branch of the Australian Medical Association.
Here’s the video of the livestream, which was streamed to YouTube and LinkedIn Live:
As brilliant and lucky as they have been, today’s generation of central bankers is afflicted with the same sense of denial that proved problematic in the 1970s. Due to a lack of experience and institutional memory of that tough period, the risk of another monetary policy blunder cannot be taken lightly.
Certainly, central banks have been running a massive monetary policy experiment with ultra-low interest rates and Quantitative Easing, which have been associated with double-digit growth rates in money stocks. I agree with Roach regarding the potential for a “monetary policy blunder”.