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2012-07-26

Academic scholars in Australia shouldn't be Chinese-scholars bashing on climate change

Comments on Justin Norrie "Rich nations should do more on climate, say Chinese" 26/07/2012,  https://theconversation.edu.au/rich-nations-should-do-more-on-climate-say-chinese-8417#comments
It seems the tone of this article appears a little biased against China and Chinese scholars.
For example, the article states "It (China) produced 8.3 billion tonnes of carbon dioxide in 2010 – an increase of 15.5% on the previous year".

Readers with a rational mind would naturally be surprised how an increase of that magnitude could occur in China at the current economic environment and at the current high level of emissions.

Then you have the more obvious first and second paragraphs:
"Greenhouse gas cuts pledged by developed countries will not be enough to stop temperatures rising by 2 degrees by 2100, according to Chinese researchers who argue wealthy nations should bear greater responsibility for tackling climate change.
The controversial assertion is contained in a paper published today in the US Proceedings of the National Academy of Sciences. The paper, produced by 37 Chinese climate scientists and statisticians, says that two types of modelling show developed nations were responsible for 60% to 80% of the global temperature rise, upper ocean warming and sea-ice reduction until 2005."

Why is that argument or viewpoint a controversial assertion? Is that because it was made by Chinese scholars?

Why in academic fields like the Conversation should people bash China and Chinese scholars?

2012-07-21

A dual Euro currency is likely to work to save the Euro in the long run


Comments on Michael Pettis "Breaking up (the euro) is hard to do", 21/07/2012, http://www.businessspectator.com.au/bs.nsf/Article/European-debt-crisis-market-reaction-policymakers--pd20120718-WB9E7?OpenDocument&src=sph&src=rot
I personally believe in neither the conviction of a single currency Europe nor the complete break up of the Euro - something in the between is likely to emerge sometime in the next couple of years and to last.
Some problematic and weak Euro members may exit the Euro, but the majority may stay.
It is possible that instead of a single euro currency in the euro zone there might be 2 currencies, that is, a dual currency system to provide some flexibility.
At the same time, they may establish some mechanism that allows a common euro bond, but allow limited internal risk sharing and fiscal transfer, but each country will still be responsible for their own actions.

2012-07-17

Role of expectations and market forces in causing economic "imbalances"

Comments on James Laurenceson “Four vital things Australian commentators don’t understand about China’s economy” 17/07/2012 https://theconversation.edu.au/four-vital-things-australian-commentators-dont-understand-about-chinas-economy-8262
While all the factors that James mentioned matter, also important is the way people's expectations change over time that influence both culture and history.
I am surprised that it wasn't mentioned that adaptive expectations could also explain many of what have been the imbalance issues with the Chinese economy.
When a developing economy changes very rapidly with considerable uncertainties, many consumers, particularly historically poor ones that are the cases with developing economies, are adaptive to the rapid change in the economy and the rise in income, so their expectations are somewhat influenced by their past low income and won't spend as much as people in rich and economically relative stable developed countries.
Another factor is the role of surplus labor has played in depressing the real wages, at least until now. While many economists, including some in China, take the market as sacred on the one hand, they leave the market force aside in analysing the imbalance in the Chinese economy. They say it was the Chinese government policy that was pro investment and pro exports.
How cynical and illogical can they be?
People need to use their creativity in research, not simply and wholly rely on existing theories or what conventional line of views.

2012-07-16

No cause for pessimism for the Australian economy


Comments on Henry Ergas “Policies standing in the way of management can do great damage”, 16/07/2012, http://www.theaustralian.com.au/news/opinion/policies-standing-in-the-way-of-management-can-do-great-damage/story-fn7078da-1226426636726
Ergas has made an important contribution to the current debates on the multi-speed economy associated with the mining boom and on productivity.
The latter first. I have made a comment on the shortcomings of the viewpoint by Gruen et al that poor manager performance was the main reasons for the latest productivity slow down, by referring the charts consisting of one cross section international data with a time seires of Australia's productivity. That mix is problematic, because it says little how the international comparison has changed over time. Further, it is doubtful that international productivity would have performed better in recent years over the pre-GFC period.
For Henry's viewpoint on the Dutch Disease in the Australian economy, although it is correct to say that adjustments are inevitable when mining booms as a result of increases in international demand for mineral and a consequential rise of the Australian dollar, the view that no policies can offset or lessen the adverse impact of the mining boom on other trade exposed sectors is likely to be false.
For one thing, his mining tax design was one of policies that could just do that if the policy was designed and implemented properly.
Further, monetary policies could be designed in such a way that lowers both the demand of Australia for international capitals and the Australian dollar.
A fine combination of fiscal and monetary policies together would make the adjustments much less painful than they have been.

2012-07-15

Dutch Disease can be managed to minimise ill effects

Comments on Ken Henry "
Ken Henry: why Australia’snon-mining sector will continue to struggle", 12/07/2012,  https://theconversation.edu.au/ken-henry-why-australias-non-mining-sector-will-continue-to-struggle-8224 

This is where many economists and government officials have been lacking in creativity and in bringing a whole practical package together to deal with challenges, although the current challenges from mining boom is a good one.
Dr Henry should realise that the Henry Taxation Review's recommendation on the mining tax is a good economic theory but is not very applicable in practice and it was this combination together with bungles by politicians and bureaucrats that have resulted the current poor state of the MRRT.
Undoubtedly, the initial design of a mining tax by the Henry Review was very ambitious and elegant in theory. But the problem was it is too theoretical but not practical. An alternative one could be as simple as a pure addition to the company tax with an link to either terms of trade using mineral exports and all imports or the relative prices of mineral exports.
Of course, that additional tax should be mostly given to the states where the additional profits are generated, with some left the to the commonwealth for national adjustment to the mining boom.
States, of course, would be part of the adjustment process using that additional profit tax revenue from mining companies.
This can limit the rise of the Australian dollar and a lower dollar is conducive to lessen the impact of the mining boom, that is, the Dutch Disease.
The so called Dutch Disease can be managed with a good national policy.
Only purely relying on the market that gives to the rise of Dutch Disease.
The main viewpoint and argument in this article belongs to the latter.