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Author's Name: Jeffrey Sheen
Date: Tue 12 Feb 2019

Jeffrey Sheen

Professor Jeffrey Sheen

Jeffrey Sheen is a Professor of Economics at Macquarie University. He has been a faculty member of the Universities of Manchester, Essex and Sydney, and has had a visiting appointment at the Reserve Bank of Australia. He obtained his PhD at the London School of Economics. He has published his research in major international journals, and his interests span macroeconomics, international economics, labour and finance. He was the Editor of the Economic Record from 2010-2015 and is now on its Editorial Board. He co-authors with Olivier Blanchard a market-leading intermediate macroeconomics textbook, which is in its 4th edition. He was the Secretary of the Central Council of the Economic Society of Australia from 2007 to 2010. He received the Honorary Fellow Award from the Society in 2015.

Subject Area Expertise

Monetary and fiscal policy, exchange rates, unemployment, systemic risk.

Website

http://www.businessandeconomics.mq.edu.au/contact_the_faculty/all_fbe_staff/sheen_jeffrey

 


Responses (36)


Motherhood, caring and the careers of Australian women - April 2019

Poll 37

Proposition 1: "Without changes to existing public policy or private sector practice in Australia, motherhood will always negatively affect a woman's career."

Proposition 2: "In Australia, fathers are more restricted than mothers in fulfilling a caring role while in employment."

 

Part 1 - Strongly agree

9

Part 2 - Strongly disagree

9


Professional Accreditation of Economists - March 2019

Poll 36

Proposition 1: "Professional accreditation for the economics profession would attract more people to economics as a career."

Proposition 2: "The benefits of professional accreditation for current and prospective economists would exceed any possible costs"

 

Part 1 - Agree

6

Part 2 - Agree

7


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

8

Clearly a false proposition. Any company in any industry has multiple stakeholders, including shareholders, customers, workforce, suppliers, management, government and society-at-large. Successful companies that survive over the longer term manage well the balance between the interests of their different stakeholders. Regulation plus supervision can always be introduced to force a company to adjust the attention given to any particular stakeholder, but this should not go beyond a minimal set of transparent requirements about ethical, legal and competitive practices. Heavy-touch interventions that go beyond will have unintended side effects and will be welfare-reducing. The retail banking sector is not a special case in this regard - the issue applies generally across the finance sector as well as many other industries. Our retail banks significantly enhance social welfare, and should be held accountable but not demonised for the misbehaviours identified in the Hayne Royal Commission.


Motherhood, caring and the careers of Australian women - April 2019

Poll 37

Proposition 1: "Without changes to existing public policy or private sector practice in Australia, motherhood will always negatively affect a woman's career."

Proposition 2: "In Australia, fathers are more restricted than mothers in fulfilling a caring role while in employment."

 

Part 1 - Strongly agree

9

Part 2 - Strongly disagree

9


Congestion pricing - November 2018

 

Agree

7


Banking Royal Commission and the Credit Crunch - October 2018

Poll 33

Proposition 1: "There is a significant risk that, either as a result of the findings and recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry or as a result of the financial institutions' response to those findings, credit will become less readily available to Australian households or businesses."

Proposition 2: "Assuming credit becomes less readily available to Australian households or businesses, this will in turn have adverse consequences for the performance of the Australian economy."

 

1 - Strongly agree

2 - Agree

1 - An overly severe credit squeeze is already underway. It will worsen further until ‘Goodhart’s Law’ eventually prevails since financial institutions invariably find ways to beat  over-bearing regulatory and supervisory constraints.

2 - In the short to medium term, the economy’s performance will be weaker as a result of the current credit squeeze. In the longer term, it is possible that the Royal Commission will help to deliver a more stable, fairer and safer financial system that in turn will mean less volatility about the economy’s trend.


Waste Policy - August 2018

Poll 32

"There are clear net benefits for Australians from (further) increasing the diversion of waste from Australian landfills."

 

Agree

7


Sugar sweetened beverage tax for Australia - July 2018

Poll 31

Proposition 1: "The best economic policy instrument available to policy makers seeking to address obesity and related health issues in Australia is the introduction of a tax on sugar sweetened beverages (SSBs)."

Proposition 2: "The health and non-health benefits from a tax on SSBs are likely to outweigh the possible costs felt elsewhere in the economy."

 

1 - Disagree

2 - Uncertain (neither agree nor disagree)


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 - Disagree

2 - Disagree

1 - Net government debt to GDP in Australia is one of the lowest among similar developed countries, bettered only by Norway, Finland, Sweden and Denmark. Its growth should be slowed and perhaps reversed when the economy is in an upswing, and conversely in a downswing. Right now, the Australian economy is close to normal growth.

2 - Given the buoyant tax revenues in 2018, the upcoming Commonwealth budget should ease outlays and tax rates or thresholds. My preference would be for income rather than corporate tax adjustments, given the declining labour share in the economy. (US corporate tax cuts will have a minimal effect on the Australian economy, and so there is no need for an Australian response.)


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."

 

Uncertain (neither agree nor disagree)

7

Through international tax competition’s long-term distributive effects and its shorter-term cyclical effects, the recent US corporate tax cuts will have an ambiguous and likely small effect on Australian investment and capital inflows.


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."

 

Uncertain (neither agree nor disagree)

5


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 - 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."

 

Uncertain (neither agree nor disagree)

6

The small boom in marriage celebrant business and maybe later divorce lawyer business won't constitute much in the way of net national economic benefit.


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 - Disagree

B - Agree

How employment will be affected depends on whether robots and AI are complements or substitutes for human effort. Substitution will compete away jobs, and if this were always true, eventually none of our labour may be able or willing to compete. However I think this is unlikely, and my best guess is that more of these technologies will complement human effort in the short and longer run, and thus require improved updating of our skills to maximise the potential.


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"

 

Strongly agree

9

Efficient infrastructure financed by government debt is highly desirable given aging demographics and dynamic inefficiency.


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."

 

Agree

7


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."

 

Disagree

9

The optimal provision of such public and private services in terms of outcomes and costs to government is almost surely a mixture.


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."

 

Agree

7


Australian Federal Budget 2017 - Outsourcing Economic Forecasting - May 2017

Poll 18

"Given the Commonwealth Treasury?s ongoing difficulty in making accurate forecasts of some of the key economic variables underpinning the Budget ? in particular nominal GDP growth ? the Government should ?outsource? the economic forecasts used in framing the Budget to an independent agency (such as the Parliamentary Budget Office), as now happens in the United Kingdom."

 

Agree

7

Treasury is more than competent at analysis and forecasts of the Australian economy, but many have the perception that Treasury is affected by ministerial interference. Setting up something like a Parliamentary Budget Office would be good if it was obviously free from any political constraints.


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

7


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."

 

Strongly disagree

8

In general, there is currently excess demand for new housing in Australia, and incentives to encourage investment in housing construction will remain vital for some time. Owner-occupied housing has a 100% capital gains deduction, while investors in housing only get 50%. Yet investors serve 30% of the market for housing, vitally accommodating people who need to rent. Making the deductions uniform may be a better idea, though politically impossible. Further, it should be noted that every year, investors also pay land tax, and the discounted present value of this over the life of the investment can be significant.


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."

 

Disagree

8

Macroeconomics can be  taught easily an effectively at an introductory level without having introductory microeconomics as a prerequisite. Of course, both micro and macro analysis at all levels benefit from a good understanding of the other.


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

8

I have to agree. The outcomes for Australia in the event of a Trump victory are much more uncertain, and are expected to be much more negative.


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)."

 

Disagree

6


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

8


Immigration - November 2016

Poll 12

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

 

Agree

5

As an ageing and productivity-challenged economy, the Australian economy will have net benefits from the net migration to Australia of skilled and young people that want to make a positive contribution. So the quality of net migration is important. However beyond  the economy, there are also many important social benefits and costs that  need to be considered, which is why migration remains such a hot political issue.


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

7

In general, this is unlikely to be true.

PART 2 - Disagree

7

In general, this is unlikely to be true.


RBA economic growth targets - August 2016

Poll 10

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

 

Uncertain (neither agree nor disagree)

9

A nominal output growth target could be only a little smarter than an inflation target. But both are poor choices. If both inflation and real output growth rise (fall), the economy is likely to be overheating (overcooling!) from a real demand shock. However in this case, the optimal monetary response is to the real output growth shock alone. If higher (lower) inflation is matched by lower (higher) real growth, it is likely that the cause is a supply shock. In this case, if hiring frictional costs are small, it is optimal to respond more to real output growth than to inflation. Only with unrealistically large hiring costs does the inflation target become optimally useful. Thus in a Taylor rule, the optimal weights on inflation and real growth will strongly favour the latter. Simply targeting only inflation or only nominal growth is definitely sub-optimal. This conclusion applies for DSGE models with rational or animal spirits expectations of inflation. If you want more proof, read this article.


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

7

In general, appropriate expenditure on education will deliver and has delivered significant technological improvements that enhances long run economic growth and the standard of living. Corporate tax cuts will stimulate capital accumulation and output growth, but are likely to have a minimal effect on long run growth.


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

7

Australia will benefit some, but it will be nowhere close to what was reaped in the mining boom. There will not be a terms of trade surge, there will not be a significant investment stimulus, and there will be only a modest expansion in services production. Those services that can cross borders economically will continue to face substantial global competition, and Australia's market share will remain small. That said, we can anticipate benefits for education and tourism in Australia.


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."

 

Disagree

6


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

Giving gifts is not simply about the receiver enjoying the gift. The act may also signal how much the giver is engaged with the receiver. By finding something the receiver would like indicates the giver's attentiveness. However some non-cash gifts can be spectacularly unsuccessful. Cash may be better if the giver has little idea about the receiver's preferences. However some receivers may be offended at the impersonal nature of a cash gift. A voucher may be better received.Further, gifting usually involves a reciprocal feature. With cash both given and received, the net payment becomes an issue. It would be zero in an equal relationship, and non-zero in an unequal one. Cash gifting can then become absurd.


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."

 

Agree

3