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World economic growth

(Correctly measured, quarter-to-quarter) Chinese economic growth in final quarter 2008 was zero or negative.  The US economy shrunk at an annual rate of 6.2%. The Japanese economy is shrinking at 12.7% annually with exports falling 45% on a year ago.   European data suggests a more severe contraction there than in the US – although that claim […]

Carcinogen sales remain strong

Despite the global financial crisis sales of carcinogens remain strong with BAT profits growing 20% in  the year to December 31.  BAT is the world’s second largest producer of carcininogens. Quote, The Financial Times:

“Although tobacco consumption is declining worldwide, tobacco companies have continued to grow profits during the past decade.

In the US and Europe, […]

Limits of redistribution

Barack Obama has an enormously expansionary fiscal program to get demand moving but promises to halve the budget deficit by the end of his (first) term.  This is a tricky promise to deliver on since he has also guaranteed not to tax US households earning less than $250,000US an extra cent.  3.8 million Americans earn more than […]

Barack Obama’s speech to Congress

I heard the economist Professor Ed Leamer’s rapturous appreciation of the Obama speech (& here, here, here, here) (on the 7-30 Report) before I saw the speech myself.  But this is an inspiring speech on a par with anything by J.F. Kennedy.  Obama sees the need for a stimulus and the need for offsetting the debt implications of […]

Sri Lanka & the defeat of the LTT?

My colleague Prof Sisira Jayasuriya made some sensible and balanced remarks on the current disasterous situation facing the Tamils in Sri Lanka in this YouTube. The LTT currently face a significant defeat but, according to Sisira, will stage a recovery – the civil war will not end. In the meantime hundreds of civilians have died […]

Scrapping private health insurance rebates a poor proposal

The Age reports this morning that the Government has been urged to scrap the 30% private health insurance rebate and to, instead, spend the money on public hospitals.  One can argue about the scale of this rebate but the subsidy makes sense in terms of standard economic theory.

Health markets in Australia are distorted by […]

Instrument instability & the global economic crisis

Robert Holbrook in 1972 drew attention to the issue of policy instrument instability.  Essentially an economic policy can become infeasible if policy needs to adjust more intensively to offset past effects of policy – the policy itself becomes an unstable process.  This type of instability is particularly likely if we try to pursue stabilisation of […]

Wong not wrong on case for an ETS

Generally I found Penny Wong’s support for an Emissions Trading Scheme (ETS) based on ‘cap and trade’ to achieve a specific level of emissions reduction over an equivalent tax persuasive.  If we knew exactly how the world operated then it wouldn’t matter at all.  One could set a quota to hit a certain desired emissions cutback or […]

Auckland & its traffic

I am visiting Auckland New Zealand for the 27th Economic Theory Workshop at Massey University. The weather is humid and warm and the coastal scenery is attractive – after the dry year in Melbourne I even enjoyed walking around in light rain. I am surprised to find that Auckland has almost the same latitude as Sydney […]

Costello is right on Rio

Despite some silly protestations over at Catallaxy I think Peter Costello is quite right to oppose the deal by Chinalco to purchase key Rio Tinto assets.  BHP-Billiton, for a time, valued Rio Tinto shares at somewhere north of 3.4 times the value of BHP-Billiton script.  They are now trading at about 1.6 times a BHP-Billiton […]

Thoughts of depression fade to long white clouds

I haven’t been posting as trying to prepare for my teaching year – research and golf had high priorities this summer and the procrastination finally caught up with me. Also I am heading off to New Zealand tomorrow for a few days for the annual Economic Theory Workshop at Massey University in Auckland. 

To two things […]

Bushfire insurance

I was intrigued to learn from a current affairs show that those insured in the bush-fire crisis paid about 40% of their property insurance premiums to government to fund the CFA. Those uninsured – there were many – paid nothing to the CFA but, of course, received the assistance of the CFA during the crisis.  […]

Suntech’s Shi Zhengrong

From being the son of a dirt-poor Chinese peasant, Shi has built one of the world’s biggest solar power companies, Suntech. He learnt his stuff at the University of NSW. Suntech is threatened somewhat by the global financial crisis and by entry from competitors but still a great force.  This Fortune article is a fascinating story […]

5 new bird species for H

In my 5 days in Cairns during the last week I observed 6 bird species that were new to me.

Laughing gull – a resident of north and south America that is a very rare vagrant to Australia.  It may have taken a wrong turn across the Pacific or followed a ship here.  Here […]

Pointless fiscal expansions that swamp us with debt but don’t reduce unemployment

I liked this article by Henry Ergas on the likely ineffectiveness of the $42 billion fiscal package introduced by the Rudd Government as it accords with my own macroeconomic priors. For a small open economy like Australia fiscal actions make sense in a standard Mundell-Fleming macroeconomic context if the exchange rate is fixed.  Monetary policy then does […]

Cost efficient terrorism control

The Chinese show how to deal with a terrorist blackmail threat.

Thanks Sir Henry

Baggage handlers strike

45 baggage handlers struck at Melbourne airport today. Thousands of commuters who pay the salaries of these irresponsible shirkers were maximally inconvenienced by this immoral wildcat strike. Passengers were told that:

Passengers were told the bag handlers stopped work because they wanted more money for breathing in smoke from the state’s bushfires that blanketed Melbourne […]

Bushfire tragedy hits home

La Trobe University academic Dr Richard Zann – an internationally reknown ornithologist – his wife Eileen and their daughter Eva all perished in the bushfires in their Kinglake home. RIP.

Five La Trobe staff have seen their homes destroyed and nine students have been left with no housing.

Meanwhile police believe arson was responsible for the death of 100 […]

Satellite images of the Victorian bushfies

Here. An update on the continuing, raging fires is here – the confirmed death toll is 181 but this is expected to increase.

Cairns in the wet & birding

I flew to Cairns this morning – I love this place but its the first time I have visited it in the ‘big wet’.

Without ado I headed that afternoon down to the Esplanade mudflats which were 0.5 km from my hotel. Met a Swedish birder there and then the legendary John Crowhurst as well […]