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Author's Name: Mardi Dungey
Date: Tue 12 Feb 2019

Mardi Dungey

Professor Mardi Dungey (past panellist)

Mardi Dungey was Professor of Economics and Finance at the University of Tasmania, Adjunct Professor at Centre for Applied Macroeconomic Analysis at ANU and Senior Research Associate at the Centre for Financial Analysis and Policy at Cambridge University. She was a Fellow of the Academy of Social Sciences in Australia. She passed away in January 2019.
Professor Dungey's research interests combined the empirical sides of finance and economics. She was a world expert in the transmission of financial crises, systemic risk and the policy implications of these events. She was a member of the Shadow Board for which provides a alternative view on monetary policy setting in Australia, and has published numerous papers and several books.
Mardi moved to the University of Tasmania in October 2008, from a position as the Deputy Director of the Centre for Financial Analysis and Policy at the University of Cambridge. She  also held positions at ANU, La Trobe University and the RBA, and was a visitor at the BIS, IMF, Princeton, Manchester, the Federal Reserve Bank of Atlanta and Australian and New Zealand Treasuries. She was a regular speaker to international forums on her research.

Subject Area Expertise

Contagion and financial crises, Macroeconomic policy, Banking and Finance, Time series Econometrics, High frequency finance


Responses (13)


Journalism as a public good - January 2018

Poll 25

Proposition 1: "The modern phenomena of information overload and social-media-fuelled 'fake news' bring into focus the value of quality journalism. Quality journalism has a public-good dimension that warrants public support."

Proposition 2: "The Australian government presently provides funding for the ABC and SBS, Australia's independent public broadcasters. The Australian government should increase its financial support of quality journalism."

 

1 - Uncertain (neither agree nor disagree)

2 - Uncertain (neither agree nor disagree)

1 - This is two pronged so difficult to answer. First one has to agree that information overload means that it has focussed attention on the quality of journalism. Is this true? Is it the quantity that has focussed attention or the proportion of the quantity that may be of questionable quality? Would it be better to have less with the same proportion of dubious quality - probably not. So I am then unsure what the role of the government is supposed to be here - in regulating the quantity or controlling the quality?

2 - The current national broadcasters quality to some extent relies on the steady income that they can provide to their contributors which should give attractive opportunities to participate in the 'best' journalism. If they do not attract the 'best'  journalists then perhaps the market is outcompeting them and they are providing some benchmark. If the quality of the national broadcasters is fine then it is not clear how more funds would address this issue. Would it crowd out resources from the rest of the journalism market? Non-government funded journalism is also important to benchmark the government funded information flow. This is a question about optimal provision of a public good which needs a properly formulated study.


Same sex marriage - November 2017

Poll 24

"Assuming that the law will be changed to allow same-sex couples to marry in Australia, this will generate net economic benefits for the nation as a whole over the next 10 years."

 

Agree

9

When we remove impediments to improving people's ability to satisfy their wants, with no material harm to others, then we improve the welfare of the population, regardless of whether there is measured economic gain in $. I suspect there will be increased dollar expenditure as people who were previously unable to take part in one of life's traditional occasions for celebration take the opportunity to do so.


Public borrowing for infrastructure investment - September 2017

Poll 22

"As interest rates are at low levels by historical standards, federal and state governments, despite their public debt levels, should be borrowing more than they currently are to invest in infrastructure"

 

Uncertain (neither agree nor disagree)

5

The question could be somewhat clearer. Where Governments can demonstrate that there are unmet infrastructure needs which are not likely to be met by private enterprise - probably because the payoff is too long term or perhaps too uncertain or has social as well as economic outcomes - then it would certainly be fitting to make more infrastructure investment. But a blanket statement on just more infrastructure investment is not wise - gilded taps in public bathrooms for example would be nonsensical. It is always possible to spend more, but what is not clear in the question is what criteria determines wise investment from unwise. Just because the nominal cost of borrowing is cheap does not determine the worthiness of a project, but it may provide an opportunity to carry out a worthwhile project. I do not think we should be scared of borrowing for projects which will have demonstrated positive outcomes which includes stimulating further development, businesses, standards of living and addressing issues of inequality.


The Finkel Review - August 2017

Poll 21

"The Finkel Review has recommended a mandatory certificate scheme that obliges electricity retailers to purchase a certain proportion of the electricity they sell from sources of electricity whose emission intensity is below a defined level. This is preferable to conventional approaches to the pricing of externalities, such as an emission tax or cap and trade scheme."

 

Strongly disagree

9

Directly pricing the externality is more economically efficient than any workaround scheme.  Energy security is critical to both growth and civil functioning (for those who doubt that would be well advised to watch the 2015 documentary American Experience: Blackout). The problems of compensation, effective communication to the public and the industry can be overcome, but they need effort and willingness to engage with difficult issues.  Ultimately what the consumers and industry want is reliable, least cost power - where that least cost takes into account the properly priced externalities. Customers who are off-grid, social services provided when networks are not well-funded by usage charges, renewables, non-syncrhonicity of newer power sources and upgrades to  existing infrastructure are all a part of the necessary points of discussion.  We need to get to grip with the market design and market failures here - these are not easily solved and involve complex interaction between the technical and social sciences sides of power generation. Rushing will not help, but neither will delaying dealing with the difficult issues.


Energy shortages - reserving Australian gas - April 2017

Poll 17

"In response to energy shortages around Australia, government policies requiring gas producers to reserve some production for domestic consumption are a good way to ensure that Australian consumers have access to sufficient gas supplies while still allowing for gas exports."

 

Agree

6

The contracts for gas export are certainly proving difficult in maintaining good domestic gas supply at (or around) world price. One way to manage this (at least in the short run) is to mandate that a certain amount be retained for Australian consumption, another would be to buy out some of the export contracts. Another might be to invest in infrastructure which allows gas to be easily transported to areas of demand.


CGT deductions - March 2017

Poll 16

"Capital gains tax deductions for housing investment should be removed because they overstimulate the housing market, contributing to rising house prices."

 

Agree

9

This area is complicated by the treatment of housing investment and owner-occupied housing for superannuation. Preferential tax treatment of capital in the form of housing creates a relative bias against other forms of capital investment, including that of small business premises. The argument that there will be insufficient property available for the rental market in the absence of an added incentive to invest in rental properties is spurious - this can be addressed in alternative and more directed ways.


Social costs of gambling - December 2016

Poll 14

"The social costs of gambling exceed the benefits (including consumer surplus from recreational gambling and tax revenue for governments)."

 

Uncertain (neither agree nor disagree)

1

This question is too poorly posed for me to answer it other than on a personal level. I would have to know (or assume) far more about the welfare function that society wanted to maximise and the relative weights put on individual freedom of expression and habit versus minimising social loss due to gambling associated health and welfare problems. Not to mention what we will include in definition of gambling - Keno? slot machines? lotto? share holdings? Where we want to draw the line is a social question also. I think one of the lessons we are learning from these poll exercises is that, as with other sciences, it is important to frame the question relatively precisely as there are a lot of potential variables that can be involved in a very general case. The alternative is that we ask the economists to state their assumptions in making their answers - that would give us an interesting view on the differences in assumptions, frameworks and answers.


Economics teaching - micro before macro - February 2017

Poll 15

"It is more effective to teach an introductory course in micro-economics first before an introductory course in macro-economics."

 

Uncertain (neither agree nor disagree)

10

Choosing between teaching microeconomics or macroeconomics first is like asking a teacher to choose which of literacy or numeracy needs to be taught first. As we teach our young children to operate in the world we teach them concepts of both literacy and numeracy as complementary and equivalently necessary skills to function in the real world. Teaching microeconomics or macroeconomics first is not the issue. Good teaching requires stimulating the student with interesting ideas and a desire to learn. Different folk are going to be excited about different aspects of the discipline. This is particularly relevant when we hear about recent calls for greater gender diversity amongst economics students for recruitment to places such as the RBA - maybe teaching in one particular way is more likely to engage one set of students and another way engages a different set of students. We need to find ways to make the subject relevant, interesting, engaging and accessible to a large variety of students with a variety of different opinions and viewpoints. We want to give them skills to articulate those viewpoints and hence influence policy and business decision making in the future.


Immigration - November 2016

Poll 12

'The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy'.

 

Strongly agree

8

The current level of immigration to Australia is relatively small as a proportion of our population. And if we look at the available evidence the effects of immigration on economic production in the longer term are almost always positive - immigrants provide us with an increase in a factor of production and in many cases a wealth of talent and innovation. There is no doubt in my mind that our "economic" experience of immigration has been positive in the long term. However, these can be accompanied by large, complex and important social issues and redistribution of resources. Generally incumbents are (at least short term) less than happy about sharing (or having forcibly removed) the resources they currently enjoy to fund improvement in conditions for others - and issues of ownership are clearly evident. For example, it is not always the case that these redistribution's have been designed to reduce inequality. My overall opinion is swayed by my social view that current (non-Indigenous) Australians are on average well off, whether by accident of birth or by moving to this country, but with that comes with responsibility to consider the circumstances of others both inside and outside our current population, and, selfishly, what they and their descendants will contribute to our society. This means that immigration and education policies are intrinsically tied together.


The Brexit - impact on UK citizens - July 2016

Poll 9

"Assuming it is implemented, Brexit will deliver net economic benefits, on average, to UK citizens within its first 5 years."

 

Strongly disagree

10

The disruption caused by Brexit will outweigh any gain in the near or medium term. The longer term will depend on the outcome of the negotiations. The most likely outcome seems to be some form of 'Norway light' version of membership. In which case the intent to prove 'sovereignty' leaves the UK with no advantage over its prior situation. There seems to have been either little understanding or a misrepresentation of the costs and benefits of EU membership amongst important parts of the constituency. The demographics of the vote clearly reflect that the young understand that they will bear the majority of the cost of this decision in reduced opportunities.


China services boom for Australia? - April 2016

Poll 6

"As the Chinese economy makes its transition from investment-led to consumption led growth, the Australian service sector which currently accounts for around 20% of total exports, will produce a second 'Chinese economic windfall' for Australians."

 

Agree

4

This is a possibility, for example the transition made by Japan produced a similar outcome in the past. However, there is no necessity that Chinese service imports should be focused on Australian exports - there is no necessarily greater natural endowment of service sector products which meet Chinese demand located in Australia as was the case for the mining boom. How much of the demand Australia can capture depends on how well we can compete in the international arena in service provision. It is unlikely that there will be a 'windfall' as such, this will need to be earned.


Efficiency of tax incentives - February 2016

Poll 4

"New tax incentives for investments in technology and innovation businesses and start-ups are likely to be inefficient."

 

Strongly agree

9

The proposals given thus far have been marketed as aiming for investment directed to employment producing activities, thus potentially crowding out alternatives which may not be as labour intensive. This is a social as well as economic question.


Penalty Rates Reform - November 2015

Poll 2

"Aligning Sunday penalty rates for hospitality, entertainment and retailing industries with the current levels for Saturday, as proposed in the Productivity Commission's draft report, will lead to more employment and greater availability of services in these industries on Sundays."

 

Uncertain (neither agree nor disagree)

7

This is a more complex question than it first appears as there is both a demand and supply side.There are many experienced and well qualified workers in this sector who choose to work only on days where they make penalty rates. Will these workers still choose to offer labour to this sector when their wages are effectively reduced? Can more/less skilled labour be simply substituted? Currently retailers tend to absorb this cost into their overall cost decisions - we don't pay higher prices in supermarkets on Sundays, so the difference is not likely to lead to much price change. Businesses which open on Sunday currently will receive some gain, but as they are already operating at minimum efficient levels of employment why would they increase their staffing levels? Small business seems the most likely to see possible increases in activity and employment. The net outcome is not clear.