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Author's Name: James Morley
Date: Tue 12 Feb 2019

James Morley

Professor James Morley

James Morley holds a Professorship in Macroeconomics at the University of Sydney. He received his PhD from the University of Washington in 1999 and has previously held academic appointments at Washington University in St. Louis and the University of New South Wales, most recently as Associate Dean (Research) of the UNSW Business School from 2014-2017. He is an Academic Fellow of the Reserve Bank of New Zealand and has been an visiting scholar at various policy institutions worldwide, including the Bank of Canada, Bank Negara Malaysia, and the Bank for International Settlements. He is a former President of the Society for Nonlinear Dynamics and Econometrics and is currently Co-Editor of the Economic Society of Australia’s flagship journal, the Economic Record. His research focuses on the empirical analysis of business cycles, stabilization policy, and sources of persistent changes in macroeconomic and financial conditions.

Subject Area Expertise

Macroeconomics, Econometrics.

Website

https://sites.google.com/site/jamescmorley/

 


Responses (29)


Royal Banking Commission (II) - February 2019

Poll 35

"There is no way to significantly increase the degree to which Australian retail banks act in the interests of consumers."

 

Strongly disagree

10

There are many ways to change incentives for banks. One would be to separate out retail banking from other financial services, as under Glass-Steagall for the US from 1933-1999. Another would be to explicitly mandate that bankers should act in the interest of retail clients and have severe sanctions for failure to do so (e.g., loss of banking license if found by the regulator to have deliberately acted against the interest of retail clients). The list could go on.


Will building more homes make housing cheaper? - May 2018

Poll 29

"A sustained increase in the number of new homes constructed each year, all else equal, will make housing cheaper than otherwise."

 

Strongly agree

10


Australian Federal Budget 2018 - Reduce government debt or provide tax cuts? - April 2018

Poll 28

Proposition 1: "Slowing the growth in the debt to GDP ratio should be a priority for Australian governments."

Proposition 2: "Slowing the growth in the debt to GDP ratio is a higher priority than income or corporate tax cuts."

 

1 - Uncertain (neither agree nor disagree)

2 - Agree


US corporate tax cuts - March 2018

Poll 27

"The recent US corporate tax cuts will have no impact on investments in and capital flows into Australia."

 

Disagree

10

Surely they will have some impact. There are a lot of factors that drive capital flows, with corporate tax rates only being one of them. But it would be extreme to think there would be no impact.


Gig economy and worker welfare - February 2018

Poll 26

"The wages and conditions of Australian workers providing services in sectors affected by the rapid growth of digital on-demand subcontracting platforms will, on average, be expected to fall without further government intervention."

 

Strongly disagree

8

Real wage growth for the Australian economy has been slow in recent years, as part of the "secular stagnation" phenomenon. But that is unlikely due to the so-called "gig economy", which really doesn't employ that many people. A more plausible explanation is slow aggregate productivity growth and a continuing weakness in domestic and global labour markets following the GFC. As the US economy recovers further and given a lower unemployment rate in Australia, we can expect wage pressures to pick up. As for the gig economy, wages (and working conditions) are poor for, say, bicyclists delivering food. But why would they fall further? Are more people really going to sign up to become poorly paid bicyclists than already have? And why on earth would we think government intervention to prop up wages of bicyclists delivering food is a good idea? I can see some regulation of working conditions for those poor bicyclists (although there's not much the government can do about early sunsets, hills, and driving skills in certain capital cities). But wage regulation sounds like a bonkers idea in response to the gig economy.


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 - Strongly agree

2 - Strongly agree


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."

 

Strongly agree

10

It will raise utility for many without actually lowering it for others. This has been seen in other countries that have allowed same-sex marriage.


Robots, artificial intelligence and the 'future of work' - October 2017

Poll 23

Question A: "Holding labor market institutions and job training fixed, rising use of robots and artificial intelligence is likely to increase substantially the number of workers in Australia who are unemployed for long periods."

Question B: "Rising use of robots and artificial intelligence in Australia is likely to create benefits large enough that they could be used to compensate those workers who are substantially negatively affected for their lost wages."

 

A - Strongly disagree

B - No opinion

It seems highly unlikely to me that AI will lead to a big increase in long-term structural unemployment. The realms in which AI can substitute for labour are quite limited in comparison to the size of the current economy (meanwhile, if AI non-trivially increases the size of the economy, that will just lead to more and/or better paying jobs). Also, most of any workers displaced by AI are likely to have transferable skills and don't live in the equivalent of the U.S. mid western rust-belt. Instead, they live in large dynamic cities with other employment opportunities... This whole "robots-taking-white-collar-jobs" scenario is overblown science fiction. Its only benefit is to focus minds on the value of general skills education rather than specific professional training.


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"

 

Agree

8

The return on investment to society is likely to be higher than the cost of borrowing given low real interest rates. So, yes, there should be more investment in public goods. But there should be some consideration to making sure large deficit-financed spending is not overly stimulative to the macroeconomy. That is, monetary policy may need to react to such fiscal stimulus by, ironically, raising interest rates. But this is only if the commitment to infrastructure investment by federal and state governments is clear.


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

8

This proposal sounds inefficient compared to a Pigouvian tax or Cap and Trade.


Does privatisation of human services hurt outcomes? - July 2017

Poll 20

"For-profit provision of human services like health and education leads to poor client outcomes and high costs to government."

 

Uncertain (neither agree nor disagree)

10

Sometimes yes, sometimes no.


Gender diversity in the workplace - role of government? - June 2017

Poll 19

"The recent Parliamentary Inquiry into "Gender segregation in the workplace and its impact on women's economic equality" was asked to examine measures to encourage women?s participation in male-dominated occupations and industries. Although there is growing awareness of the productivity gains of gender diversity, the private market alone is unlikely to steer the Australian labour market toward gender equality in male-dominated industries. Breaking down gender segregation in the labour market can only be achieved with some degree of government intervention."

 

Strongly agree

10


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."

 

Strongly disagree

10


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)

7

Samuelson's classic textbook started with macro. People seemed quite capable of learning economics well enough when his text was ubiquitous. But I think people are just as capable learning economics if they start with micro. I have yet to see a compelling pedagogical argument for a specific ordering. My guess is that it is only people who don't really believe macro exists who would suggest it is essential to start with micro. I'm not one of those people.


2016 US Election - November 2016

Poll 13

"Hillary Clinton is likely to be the superior US presidential candidate for the Australian economy and for Australia."

 

Strongly agree

10


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)

5

It is difficult to measure social costs or consumer surplus. Gambling provides some utility to its participants, but it is also addictive. In saying definitively whether the costs exceed the benefits, I would worry about implying either support for outright prohibition of all forms of gambling or support for a completely unregulated market. I would think many limits should be placed on gambling to reduce its ability to lead to financial ruin (e.g., allow low-stakes gambling like community-hall bingo, but tax or limit participation in higher-stakes contests). For risk-lovers who particularly seek out high-stakes gambles, there are always financial markets available to participate in and these markets even sometimes have positive expected returns, making them a far superior, if less glamorous, option for satisfying their needs. Also, a Pigouvian tax that helps cover some of the costs placed on society could make sense. But gambling will occur regardless of whether it is in a legal market. So outright prohibition really isn't the solution.


Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.' Part 2: 'It is unethical for governments to use behavioural economics to

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

 

Agree

5


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

10


Behavioural economics - September 2016

Poll 11

Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.'

Part 2: 'It is unethical for governments to use behavioural economics to "nudge" citizens.'

 

PART 1 - Disagree

8

PART 2 - Disagree

8


RBA economic growth targets - August 2016

Poll 10

"The Reserve Bank of Australia should be tasked with targeting nominal economic growth rather than inflation."

 

Disagree

8

A nominal GDP target is effectively a price level target (since the RBA cannot control real GDP in the long run). Such a target would be harder to communicate to the general public (and, therefore, shape their expectations) than an inflation target. It is also more sensitive to measurement problems than an inflation target. An inflation target that is achieved over a 1-3 year horizon is easier to communicate and implement. So I would recommend sticking with what has been a very successful policy framework rather than adopting this proposed alternative.


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."

 

Disagree

7


Spend on education or business tax cut - June 2016

Poll 8

"Australia will receive a bigger economic growth dividend in the long-run by spending on education than offering an equivalent amount of money on a tax cut to business."

 

Strongly agree

8

Estimates on returns to education are larger and more precise than estimates on the effects of tax cuts on investment and long-run growth.


Budget 2016-17 - Returning to surplus - May 2016

Poll 7

"The recently released 2016-17 Commonwealth Budget projects that the Australian Government's underlying cash balance will return to surplus by 2020?21*. Australian politicians should rebalance the budget with greater urgency."

 

Disagree

9

Fiscal policy should be conducted in a way that helps achieve stable macroeconomic outcomes, while at the same time being consistent with debt sustainability. It is important to note that this conduct could be entirely consistent with an absence of a budget surplus between now and 2020-21. The appropriate level of the budget balance will depend on a number of factors and, subject to current expectations about the debt-to-GDP ratio, should not be dogmatically set to surplus if it is at the cost of achieving stable macroeconomic outcomes.


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."

 

Uncertain (neither agree nor disagree)

5

Assuming higher education is a big component of the 20% of total Australian exports related to the services sector, I don't think there is likely to be an increase in demand from China. But there may well be other service exports (financial services?) that could grow at a faster rate.


Efficiency of tax Government investments in major sporting events - February/March 2016

Poll 5

"Government investments in major sporting events usually generate net benefits for the city or region where the investment is made."

 

Disagree

8


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

10

These incentives will lead to more investment in projects with lower rates of return rather than projects with "public good" spillovers such as produced by basic research.


Bah Humbug Australia - December 2015

Poll 3

"Giving specific presents as holiday gifts is inefficient, because recipients could satisfy their preferences much better with cash."

 

Disagree

7

Economists are (in)famous for disliking the dead-weight loss of Christmas, and it is a legitimate concern. But gift giving can also serve the useful social purpose of influencing preferences.


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."

 

Strongly agree

8

A casual glance at experiences in other countries with similar cultural histories (e.g., Canada) would suggest that this is so.