Economics Roundtable

First up, I have to say that it was good to watch a budget without having to put up with Peter Costello. Unlike Howard, I never regarded Costello as having any real substance. Even after 11 years on the job, his mastery of his portfolio was a clever barrister’s mastery ...

It’s unclear whether we are bound for a Post-American World in the near future, but it seems pretty clear that we are bound for a world in which the US dollar is no longer the unique ‘reserve currency’. The combination of chronically large trade and budget deficits and willingness ...

Among the outcomes produced by a market economy, real wages are arguably the most important single variable for most people. With inflation rising around the world, and sensitive prices like those of food and petroleum going up a lot, most people’s living standards depend mainly on whether wages grow faster ...

The Queensland government has abandoned the idea of piping water from the Burdekin to the Southeast corner. A $350 000 study by GHD concluded that the proposal would be ruinously (as in $14 billion) expensive. I could have told them that for free, just by looking at the studies ...

Sorry again for late notice, but I’ll be presenting a video seminar 1pm today at ANU on intergenerational equity. For details contact Ralf Steinhauser on ph: 61 2 6125 4667

I got a very long comment from John Mashey caught in moderation, so I’ve decided to put it up as a guest post. John makes a number of important points, but doesn’t convince me that oil is essential to economic activity, for reasons I hope to spell out in a ...

The big increase in food prices over the last six months or so raises lots of issues, of which I’ll try to cover a few.

The first arises from the fact that prices for commodities, including oil as well as most ag commodities, are typically quoted in $US. In a situation ...

Ross Gittins had a piece in the SMH yesterday offering an intriguing line of defence for the privatisation proposals of the Iemma government, in the face of attacks from me and Nicholas Gruen. As Gittins concedes Iemma’s arguments, based on the idea that the sale will protect the states ...

It’s just been announced that JP Morgan will buy Bear Stearns for $2 a share, implying a value of about $250 million. Given that the company headquarters is said to be worth about $1.2 billion, that give the BS banking business a value of negative $1 billion. And that’s ...

The Fed’s bailout of Wall Street investment bank Bear Stearns has, unsurprisingly, been discussed in terms of the domino theory. A more appropriate metaphor is The Wonderful One-Hoss Shay . This was a carriage constructed on the theory that a system always fails at its weakest spot.