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Podcast episode

EP119: What Tony Makin taught us about macroeconomics

The late Professor Tony Makin was a leading Australian economist who made major contributions to the economic policy debate in Australia on the balance of payments and the effectiveness of fiscal stimulus, of which Tony was highly sceptical. In Economics Explored EP119, Former Ambassador to the OECD for Australia Dr Alex Robson, now an Associate Partner at EY, reflects on Tony’s contributions to open economy macroeconomics and the policy debate.  

About this episode’s guest – Dr Alex Robson

Dr Alex Robson is Associate Partner at EY. He has previously been Professor of Economics at Griffith University, Australian Ambassador to the OECD, Chief Economist for the Australian Prime Minister, a lecturer at ANU, and Director at Deloitte Access Economics. He is the author of Law and Markets, and has consulted to ASX 200 companies, Australian and NZ Government Departments and the OECD. Alex has a PhD and Masters in Economics from University of California, Irvine, USA.

Celebrating the Life of Anthony John Makin

Gene’s Economics Explored conversation with Tony: A Fiscal Vaccine for COVID-19 with Tony Makin – new podcast episode

Tony’s critique of the 2008-09 Australian Government fiscal stimulus: Did Australia’s Fiscal Stimulus Counter Recession?: Evidence from the National Accounts

Tony’s paper for the Minerals Council of Australia which prompted a critical response from the Australian Treasury: Australia’s Competitiveness: Reversing the Slide

Australian Treasury’s 2014 Response to Professor Tony Makin’s Minerals Council of Australia Monograph – ‘Australia’s Competitiveness: Reversing the Slide’

Tony’s 2016 paper prepared for the Treasury reiterating the arguments he previously made about the ineffectiveness of fiscal stimulus: The Effectiveness of Federal Fiscal Policy: A Review 

Alex’s papers with Tony (NB full articles behind paywalls): Missing money found causing Australia’s inflation, The Welfare Costs of Capital Immobility and Capital Controls 

Gene’s paper with Tony: The MMT Hoax

Thanks to the show’s audio engineer Josh Crotts for his assistance in producing the episode. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

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Economics Explored Live

US inflation and Aussie jobs data – 15 October 21 livestream

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:

Regarding inflationary pressures in advanced economies, I quoted leading market economist Stephen Roach from his recent Financial Times op-ed The sequencing trap that risks stagflation 2.0:

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”.

Other links relevant to the livestream include:

Pete Faulkner’s post Labour Force; national data hit by lockdowns while QLD powers ahead

QEW post featuring my The Other Side interview on Australia’s economic suicide

Vaccination numbers and statistics

ABS: New data shows lockdown impacts on business turnover

Cross-posted at http://www.queenslandeconomywatch.com. Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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Podcast episode

EP97 – BS jobs critique + CBDC thoughts from Dr Nicholas Gruen

David Graeber’s BS jobs thesis (previously covered in EP95) lacks microeconomic foundations, according to Dr Nicholas Gruen. In EP97, Economics Explored host Gene Tunny speaks with Nicholas about BS jobs and also about Central Bank Digital Currency (CBDC). Nicholas is a big believer in the potential of CBDC, which he has written about in the Financial Times.

About Dr Nicholas Gruen

Dr Nicholas Gruen is a policy economist, entrepreneur and commentator on our economy, society and innovation. He is CEO of Lateral Economics, Visiting Professor at Kings College London Policy Institute and Adjunct Professor at UTS Business School.

He was a Chairman of the Open Knowledge Foundation (Australia) (ending 2020), Chairman of international aged care management software provider Health Metrics (ending 2019), Council Member of the National Library of Australia (ending 2016), chaired the Federal Government’s Innovation Australia (ending 2014) and chaired the Australian Centre for Social Innovation (TACSI) (ending 2016). He was the founding chair of Kaggle which was sold to Google and is an investor in numerous other Australian and international start-ups. He was also founding chair of HealthKit (now Halaxy). He has advised Cabinet Ministers, sat on Australia’s Productivity Commission and founded Lateral Economics and Peach Financial in 2000.

Links relevant to the conversation

Re. BS jobs:

https://queenslandeconomywatch.com/2021/07/10/people-escaping-bs-jobs-covered-in-my-latest-podcast-episode-and-going-into-business-for-themselves/#comments

https://www.griffithreview.com/articles/trust-competition-delusion-gruen/

Re: CBDCs:

https://clubtroppo.com.au/2021/05/19/central-banks-get-serious-on-digital-currencies-2/

https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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Podcast episode

EP68 – COVID and Wartime: Comparison of economic impacts

Economics Explored episode 68 COVID and Wartime features a conversation on whether COVID can be compared to wartime, which considers the different scales and scopes of the shocks, and what it all means for prospects for economic recovery. Economics Explored host Gene Tunny, an Australian professional economist and former Treasury official, speaks with businessman Tim Hughes, also based in Brisbane, Australia.

Gene and Tim conclude that a comparison of COVID to wartime isn’t valid. One reason is that World War II required a complete reorganisation of the economy to maximise production for the war effort, while COVID has involved restrictions that have reduced economic activity. 

Links relevant to the conversation include:

Comparing COVID-19 to past world war efforts is premature — and presumptuous

US Council on Foreign Relations Backgrounder on The National Debt Dilemma

Brookings on What’s the Fed doing in response to the COVID-19 crisis? What more could it do?

Australia’s Boldest Experiment (excellent book on Australia’s wartime economy)

Robert Gordon’s The Rise and Fall of American Growth (outstanding book by a leading US economist containing a great discussion of America’s wartime economy)

Aussies over-confident after being over-compensated by Gov’t for COVID-recession

Mint security lapse amazes judge (story about theft from the Australian Mint in early-to-mid 2000s)

Finally, the word Gene got stuck on at 6:55, irredentist, means, “a person advocating the restoration to their country of any territory formerly belonging to it”, according to Oxford Languages.

If you’d like to ask a question for Gene to answer in a future episode or if you’d like to make a comment or suggestion, please get in touch via the website. Thanks for listening.

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Podcast episode

EP66 – Money and Cryptocurrency

When I recorded the latest episode of my Economics Explored podcast last Friday afternoon, the price of one Bitcoin was a bit above US$18,000 after having failed to get beyond US$20,000 in the previous weeks. In my chat with my friend Tim Hughes, I said who knew what it would end up at when the episode was finally released. Well, it turns out that the price of one Bitcoin has finally gone beyond US$20,000 (check out this Coindesk report).

The US$20,000 Bitcoin price is the latest illustration of the Greater Fool Theory. If you’re buying Bitcoin at this price you’re speculating/gambling you’ll find a greater fool who’ll buy it at a higher price. Coindesk suggests there could be a lot of greater fools out there:

Breaking above $20,000, which represented a significant hurdle in the mindset of most traders, is entirely new ground for bitcoin and opens the doors for a climb to $100,000 over the course of 2021, according to some.

As I discussed with Tim, and in my Queensland Economy Watch post from Saturday, Huge swings in Bitcoin value make it hard to believe it will ever replace traditional currencies, I’m very sceptical about the value of Bitcoin. But, hey, it’s 2020, and Bitcoin’s insane valuation is just another marker of this extraordinary year.

Please feel free to comment below. Alternatively, please send and comments, suggestions, or questions to contact@economicsexplored.com