News
Friday Fodder (16/24)
Our states should close their foreign offices; the Zuck discusses his AI strategy; why we can't build any more; economists debate AI and productivity; and will China invade Taiwan?
Latest
Growth
The Kiwi in the coal mine
New Zealand's economy is in trouble, with a double-dip recession and shrinking per capita growth. The decline stems from a lack of productivity reforms and an excessive focus on equity over efficiency. But Australia isn't much better, and we could easily join them if policymakers get complacent.
Budget
We're number two!
In 2023, the IMF ranked Australia #2 in the G20 for budget management, mostly due to good luck and fortuitous timing. The government's "responsible approach" claim is overstated and our fiscal position remains vulnerable to economic shocks.
News
Friday Fodder (15/24)
Senator Nick McKim wasted everyone's time for a headline; the replication crisis in social sciences rolls on; why even a little productivity matters; manufacturing can't create enough good jobs; and how crises past can have long lasting effects on people's financial decision-making.
Artificial intelligence
AI as a force multiplier
Today's AI, with its many flaws, is more of a force multiplier than revolutionary tech. Australia should avoid rushing to compete with global leaders in the name of AI sovereignty and instead focus on building guardrails, without being so prescriptive as to kill innovative attempts at AI diffusion.
Industrial policy
How can we afford not to?
Australia should resist Albo's "Future Made in Australia", which will make all but a few well-connected businesses and workers worse off. Instead, we should focus on boosting industry productivity through reforms such as eliminating trade barriers and zoning restrictions.
News
Friday Fodder (14/24)
How are interest rates affecting Australia; merger reform and misunderstanding competition; India's Modi and policy uncertainty; and does Australia need parliamentary reform?
China
Can Xi Jinping rescue China's economy?
China's economy faces structural issues that Xi's policies can't fix. His "new quality productive forces" strategy will distort the economy and fail to make China rich. To stay ahead, Australia should embrace China's subsidised exports to benefit consumers while ensuring economic flexibility.
Industrial policy
Why Australia should stop digging into industrial policy
The Albanese government's "new approach" to industrial policy is simply mid-20th century interventionism with a lick of green paint. It is wasting money on uncompetitive industries and creating a reliance on subsidies that are politically difficult to remove, burdening consumers and taxpayers.
News
Friday Fodder (13/24)
Inflation should be the highest policy priority; Bayesian reasoning and the Wuhan lab leak; the urgent need for economic reform; how to reduce debt, Jamaica style; and even when wrong, models can be useful.
Monetary policy
A sticky, stagflationary mess
Australia risks "sticky" inflation if real wages start to outpace productivity, requiring higher rates longer and job losses as businesses start to adjust on the employment rather than not wage margin. Continued fiscal deficits also fan future inflation risks.
Sport
Brisbane should sprint from the Olympics
Brisbane should withdraw from hosting the 2032 Olympics. The cancellation costs will pale into comparison to the billions that will be wasted in cost overruns and the creation of underutilised facilities, funds which would be much better spent on other priorities.