This is the first of four blog posts I will be writing for ESSA from the 41st Australian Conference of Economists, co-hosted by Economics Society of Australia and Victoria University. This blog aims to give its readers an insight into the key discussion topics at the ACE conference which created hearty debate amongst some of Australia’s pre-eminent economists.
There will be a lot of people tuning into Wayne Swan’s budget speech on Tuesday night, and not just from within Australia. Provided that the Treasurer delivers a much-hyped budget surplus (despite a softening in tax revenues due to the global slowdown), he will be able to claim that Australia is one of the first developed economies around the world to emerge from the threat of the Global Financial Crisis.
In recent years, Australian households have been saving a significantly larger proportion of their disposable income than in the previous two decades. Although the December quarter’s National Accounts data revealed a slight easing in the household saving ratio, the overall picture remains the same. Following a significant spike in December 2008, Australia’s household saving ratio has remained elevated at levels not seen in over two decades. Is this the corollary of the ‘cautious consumer’? Or does it merely reflect a return to more normal patterns of behaviour?
I attended my first Downing Lecture on Thursday night, and heard a fascinating speech by Professor John Micklewright, a research fellow from the Melbourne Institute. It was an interesting account on how the GFC had affected household incomes and income distribution across OECD countries. This blogpost will focus only on Professor Micklewright’s research on household incomes, starting with his findings and then giving you my response and reaction to his research.
Anyone reading the news lately would’ve surely caught on that something is amiss in Europe: The so called ‘PIGS’ (Portugal, Ireland, Greece and Spain), and especially the Greeks have been on the edge of default for months, causing rumours that the Euro may be headed to the scrap heap. If any of you still remember, the Euro was introduced with great fanfare nearly ten years ago which was supposed to promote closer ties both politically and economically for the EU members in the Euro-zone (The sub-group in the EU that uses the Euro as their currency). So why then, has the Euro’s health deteriorated to such a sickly state?