Comments on Ben Packham “CEOs say Australian lifestyle is under threat without moderate population growth”, 28/02/2011, http://www.theaustralian.com.au/national-affairs/ceos-say-australian-lifestyle-is-under-threat-without-moderate-population-growth/story-fn59niix-1226013441955
It should be no surprising that BCA is calling for this, because it is in business interests to do so. After all, BCA represents businesses.
However, it can be an entirely different matter for the Australian public at large.
For the latter, it is per capita that matters more and also there is a distribution of the nation's wealth between business owners and the general public. They can have very different implications.
The argument that a 36 million population by 2050 is a "sensible" target that will strengthen the economy and improve communities lacks convincing factual backup, if the current lack of infrastructure and the consequential deterioration of real living standard taking that into account is used as a guide.
Growth without productivity means little to the majority of the Australian public. Most residents would prefer higher productivity or higher per capita growth than lower productivity growth and lower per capita growth with a larger population.
BCA should not confuse the public with weasel words like economic growth, because it means very differently to different people. It must be upfront with the Australian public on what it means too.
Showing posts with label Political economy. Show all posts
Showing posts with label Political economy. Show all posts
2010-06-07
Political economy of trade, partial economic theories/models and true optimality
Comments on Ronald I. McKinnon “Why exchange rate changes will not correct global trade imbalances”, 5/06/2010, http://www.eastasiaforum.org/2010/06/05/why-exchange-rate-changes-will-not-correct-global-trade-imbalances/
It appears that there are more than one factor working in the issues of trade balances - the elasticity and more fundamentally savings and investment behaviours, as well as various preferences and behaviour inertias, both short and long terms.
So the economic reality is invariantly much more complex than many nice but mostly partial economic theories and models based on certain assumptions and focus on certain aspects of the reality.
The main issues are largely empirical in nature.
The US has tended to run trade deficits for fairly long period of time, with different countries on the other side of the balance from time to time and as its target of trade wars.
The question is not just China with its currency pegged to the $US has trade surplus with the US, but also some other countries whose currencies are free to adjust that also have trade surpluses with the US.
While the US can blame China for fixed exchange rate, how should it blame those other countries? Which countries should and can the US to blame for its budget deficits over a very long period that is internal in nature? Still external high savings countries?
Besides, bilateral trade balance is not and should not be the benchmark for trade balance in a multi-country trade in the world as it is. To require bilateral trade balance will mean huge losses in global welfare due to losses in trade opportunities.
Further, optimal trade balance even for a country should be over a sufficiently long period and should not mean balance year by year.
But trade is economic as well as political, so people from short term political point of view often selectively quote or use some partial economic theories to their advance their arguments. Even economists sometimes can act either inadvertently or deliberately in that way.
Paul Krugman, a fairly recent Nobel Economics laureate, is an example in this regard. Of course, he is famous for strategic trade theories, after all.
It appears that there are more than one factor working in the issues of trade balances - the elasticity and more fundamentally savings and investment behaviours, as well as various preferences and behaviour inertias, both short and long terms.
So the economic reality is invariantly much more complex than many nice but mostly partial economic theories and models based on certain assumptions and focus on certain aspects of the reality.
The main issues are largely empirical in nature.
The US has tended to run trade deficits for fairly long period of time, with different countries on the other side of the balance from time to time and as its target of trade wars.
The question is not just China with its currency pegged to the $US has trade surplus with the US, but also some other countries whose currencies are free to adjust that also have trade surpluses with the US.
While the US can blame China for fixed exchange rate, how should it blame those other countries? Which countries should and can the US to blame for its budget deficits over a very long period that is internal in nature? Still external high savings countries?
Besides, bilateral trade balance is not and should not be the benchmark for trade balance in a multi-country trade in the world as it is. To require bilateral trade balance will mean huge losses in global welfare due to losses in trade opportunities.
Further, optimal trade balance even for a country should be over a sufficiently long period and should not mean balance year by year.
But trade is economic as well as political, so people from short term political point of view often selectively quote or use some partial economic theories to their advance their arguments. Even economists sometimes can act either inadvertently or deliberately in that way.
Paul Krugman, a fairly recent Nobel Economics laureate, is an example in this regard. Of course, he is famous for strategic trade theories, after all.
2009-05-05
Let's be "first things first" on the Ruddnet please, Mr Colless
Comments on “Ruddnet divides a nation” by Malcolm Colless, The Australian, 5/05/2009, on http://www.theaustralian.news.com.au/story/0,25197,25429083-7583,00.html
Your statement that "Who will be able to tap into this upgraded communications delivery pipe is clearly a key component of the Government's $43 billion broadband strategy" and the whole article seem to miss even a big point, that is, how many users will be able to afford to use at a reasonably expected rate of commercial return to investment. The political economy of cities versus rural is important and the government has to consider its implications carefully. But it has to be premised on the commercial feasibility of the whole project, unless the government is so fool-headed that it ignores the commercial reality of the project.
While it might be very attempting to build and have a grandeurs, “state-of-the-art, world's-best, communications platform for Australia”, one has to be realistic and rational using sound economic and business analysis, and resist the urge to instinctively go for the best technologically but very poorly economically, no matter how uncomforting it may be. The issue of the nation’s “affordability” is far more important than the secondary political economy consideration of city versus rural divide. And it is even more pointing at a time of great recession and ever ballooning government budget deficit.
Your statement that "Who will be able to tap into this upgraded communications delivery pipe is clearly a key component of the Government's $43 billion broadband strategy" and the whole article seem to miss even a big point, that is, how many users will be able to afford to use at a reasonably expected rate of commercial return to investment. The political economy of cities versus rural is important and the government has to consider its implications carefully. But it has to be premised on the commercial feasibility of the whole project, unless the government is so fool-headed that it ignores the commercial reality of the project.
While it might be very attempting to build and have a grandeurs, “state-of-the-art, world's-best, communications platform for Australia”, one has to be realistic and rational using sound economic and business analysis, and resist the urge to instinctively go for the best technologically but very poorly economically, no matter how uncomforting it may be. The issue of the nation’s “affordability” is far more important than the secondary political economy consideration of city versus rural divide. And it is even more pointing at a time of great recession and ever ballooning government budget deficit.
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