I read two articles at the airport early this morning, while I was waiting for a flight, which I wish I hadn’t read. The first was bemoaning the approaching “$A1 trillion problem” that apparently the Australian government and all of us are about to face. It was written by a journalist who is schooled in…
Central banking
I have said this many times – monetary policy is not fit for purpose and central banks should be prevented from having discretionary powers to alter rates at will. There are two levels of justification for that assertion. First, at the ideological level, a major (dominant under neoliberalism) arm of macroeconomic policy should not be…
In some respects, we are back to where we were in 2021 when the supply constraints that arose from the COVID lockdowns and widespread illnesses started to reveal themselves in escalating prices around the world. This time it is the US-Israel folly in the Middle East that is the culprit and the supply constraints are…
Last week, the RBA increased interested rates claiming there was a growing capacity constraint (even though there is 10.2 per cent labour underutilisation) and inflationary expectations were increasing and in danger of propelling inflation even further. The RBA governor once again threatened the Treasurer along the lines of ‘unless you cut net spending we will…
The income and wealth inequality that continues to grow in most advanced nations has led to some new terminology being introduced into the lexicon of economic terms, the – K-shaped economy: When growth moves in two different directions. When this pattern of growth is identified you know how far out of kilter the world has…
Regular readers will know that I hate the term NAIRU – or Non-Accelerating-Inflation-Rate-of-Unemployment – which is a concoction invented by mainstream economists to maintain unemployment at elevated levels (to keep the working class in its place) and give cover to central banks to run monetary policies that redistribute income from poor to rich. If you…
In the annals of ruses used to provoke fear in the voting public about government deficits, central bank currency issuance, and fiscal activism, the experience of Germany in the 1920s was a long-standing favourite, that could be wheeled out on demand and have immediate effect. Wheelbarrows full of money being pushed to the local bakery…
The Reserve Bank of Australia (RBA) increased the policy rate by 0.25 points on Tuesday and claimed that it was because the inflationary outlook was in danger of accelerating out of control as a result of excessive demand pressures. This followed last week’s CPI release which showed the December increase to be 0.96 points. When…
These notes will serve as part of a briefing document that I will send off to some interested parties in Japan. Japan is about to go to the poll for a snap national election on February 8. The recently installed Prime Minister, Ms Takaichi is betting that her recent solid showing in the polls will…
I have limited time today to write a blog post and last night I was sent a new video that I recently recorded with my research colleague at Kyoto University, Professor Fujii where we talk for some hours on the topic – Japan at a Crossroads: Fiscal Policy, China, and the Growth. It was a…