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China’s behaviour warrants increased scrutiny of foreign investment

I have an op-ed in The Mandarin on the government’s new national security test for foreign acquisitions. Full text below the fold.

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posted on 09 July 2020 by skirchner in

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My interview with David Beckworth’s Macro Musings podcast

My interview with David Beckworth’s Macro Musings podcast is now available. We talk inflation vs NGDP targeting, Australia’s recent macroeconomic history and what they put in the water at the BIS.

posted on 30 June 2020 by skirchner in Monetary Policy

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Globalisation and labour productivity in the OECD: What are the implications for post-pandemic recovery and resilience?

I have a new report out with the United States Studies Centre on ‘Globalisation and labour productivity in the OECD: What are the implications for post-pandemic recovery and resilience?’

Globalisation is measured on the basis of both the depth and breadth of international connections and so is consistent with seeking greater diversification among trading partners to increase resilience to international shocks.

The report finds a positive relationship between globalisation and productivity for the OECD over the period 1970-2017 and provides a basis for measuring the loss of productivity due to the COVID-19 de-globalisation shock.

The report also finds a negative relationship between the government share of consumption spending and labour productivity, pointing to the need to wind back COVID-19 stimulus measures in the long-run, although these should not be withdrawn prematurely.

The report underscores the importance of restoring and improving Australia’s international connectedness as part of the government’s effort to boost post-pandemic productivity and resilience.

posted on 04 June 2020 by skirchner in Economics

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The US is central to this China trade quarrel

I have an op-ed in The Canberra Times on why Australia-China trade tensions are as much about our trade and industry policy as they are about our foreign policy.

posted on 25 May 2020 by skirchner in Free Trade & Protectionism

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Birmingham on thin ice challenging China to take Australia to the WTO

I have an op-ed in the AFR arguing our barley producers are just as much casualties of Australian industry and trade policy as they are of Chinese foreign policy. As one trade lawyer put it to me, China will wait for Australia to launch a WTO case, then retaliate with WTO complaints against our duties on Chinese imports and negotiate the cases jointly at the WTO.

posted on 15 May 2020 by skirchner in Free Trade & Protectionism

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My Substack newsletter

This blog is a legacy medium, but still has a few hundred subscribers via RSS. If you would prefer to get content alerts via email rather than RSS, you can do so via my Substack newsletter.

posted on 30 April 2020 by skirchner in Economics

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What COVID-19 means for Australian productivity

I have a piece at the Committee for the Economic Development of Australia blog on the implications of the current pandemic for Australian labour productivity based on my recent report for USSC.

David Uren also writes up my report for the Australian Strategic Policy Institute blog, The Strategist.

posted on 23 April 2020 by skirchner in Economics

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Coronavirus means globalisation has suffered but we must not give up on trade links

I have an op-ed at ABC Online arguing that the current disruptions to the global economy dramatise the hidden benefits of globalisation. We can now see more clearly than ever the extent to which our standard of living depends on integration with the global economy.

posted on 17 April 2020 by skirchner in

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Failure to converge? The Australia-US productivity gap in long-run perspective

I have a new report out with the United States Studies Centre on the Australia-US productivity gap in long-run perspective.

The report discusses the relationship between US and Australian productivity and how the openness of the Australian economy has allowed us to import productivity trends from the global frontier represented by the United States.

A key implication is that the globalisation of the Australian economy is an important determinant of Australian productivity growth. The slower pace of globalisation since the mid-2000s explains the slowdown in productivity growth in ways that competing explanations do not.

The report concludes that re-establishing and improving Australia’s international connectedness must be a priority for Australian policymakers in the aftermath of the pandemic.

posted on 16 April 2020 by skirchner in Free Trade & Protectionism

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My interview with Scott Sumner

My interview with Scott Sumner from the Mercatus Center at George Mason University on monetary and fiscal policy responses to the pandemic, the future of globalisation and his forthcoming book on market monetarism.

posted on 14 April 2020 by skirchner in Economics

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RBA money printer didn’t go brrrr

I’m in USSC’s The45th explaining why the RBA’s money printer didn’t go brrrr.

posted on 25 March 2020 by skirchner in Monetary Policy

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Policy Forum: Macroeconomic Issues in a Changing World

The March 2020 issue of the Australian Economic Review is out, with a Policy Forum including my article on The Effect of Changes in Monetary Policy on Consumer and Business Confidence. Be sure to also read Bruce Preston’s article in the same issue on The Case for Reform of the Reserve Bank of Australia Policy and Communication Strategy. There is a CAMA Working Paper version of Bruce’s article for those without access to the journal.

I’m pleased my paper contributed to the RBA walking back the contention in the November Board minutes that rate cuts hurt confidence. The draft paper was circulated within the Bank by John Simon, which was fitting given that it was essentially an update of his 2001 RBA RDP on the determinants of sentiment. John’s 2001 results hold-up quite well. Bruce’s paper also discusses why the contention in the November Board minutes is incoherent from a strategy and comms perspective.

The final capitulation came when Governor Lowe explicitly rejected the idea that rate cuts hurt confidence in testimony before the House Economics Committee, responding to some very effective questioning by Andrew Leigh.

posted on 28 February 2020 by skirchner in Monetary Policy

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RBA’s foot-dragging leaves economy dangerously exposed

I have an op-ed in the AFR on the lessons from the US experience with monetary policy for the RBA in the wake of yesterday’s official interest rate decision.

posted on 05 February 2020 by skirchner in Monetary Policy

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The evidence suggests Reserve Bank rate cuts don’t hurt confidence

In The Conversation, I round-up the US and Australian evidence on the effect of monetary policy on consumer confidence. There is little evidence for a perverse signalling effect from rate cuts on confidence, contrary to suggestions by the RBA Board.

posted on 04 February 2020 by skirchner in Monetary Policy

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The Effect of Monetary Policy on Consumer and Business Confidence

I have an article forthcoming in the March issue of the Australian Economic Review examining the US and Australian evidence on the effect of monetary policy on consumer and business confidence. It has been suggested that recent reductions in official interest rates might have a perverse signalling effect on consumer and business confidence. But that is not what the US and Australian evidence or my own estimates suggest. While consumers talk their book in relation to expectations for their own finances, when it comes to expectations for the economy as a whole, consumers and business are for the most part clear about rate cuts being expansionary for the economy.

As noted in the article, even if rates cuts did have a perverse signalling effect on confidence, this would not be an argument against monetary easing. It implies that the Reserve Bank should not act on its assessment of the economy, which is likely to be self-defeating.

Shane Wright writes up the paper for the SMH/Age in the context of the January consumer confidence release.

posted on 24 January 2020 by skirchner in Monetary Policy

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