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Author's Name: Joaquin Vespignani
Date: Tue 12 Feb 2019

Joaquin Vespignani

Dr Joaquin Vespignani

Dr. Joaquin Vespignani is associate professor at University of Tasmania, he specialises in the area applied macroeconomics. He is also program director and research associate of the Centre for Applied Macroeconomic Analysis at the Australian National University, and the Globalization and Monetary Policy Institute at the Federal Reserve Bank of Dallas. He has published widely in internationally recognised journals in economics and finance, including: Journal of Banking and Finance, Energy Economics, Canadian Journal of Economics, and Economics Letters. He also serves on the National Economic Panel at the Economic Society of Australia. In 2017, Dr. Vespignani has been identified by the RePec ranking system as the top Australian young economist (for the second year running) and top 10 globally (within 5 years of PhD graduation).

Subject Area Expertise

Applied Macroeconomics, Monetary Economics and Energy Economics.

Website

http://joaquinvespignani.com

 


Responses (18)


Top Economists see no prolonged high inflation, no rate hike next year (Q4)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 4

"Following the next Federal election, the incoming Federal Government should commission an independent Review of the Reserve Bank of Australia."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Agree


Top Economists see no prolonged high inflation, no rate hike next year (Q3)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 3 

"The Reserve Bank has, over the past 5 years, effectively used the tools available to it to achieve its goals of "maintaining the stability of the currency, ensuring full employment and furthering the 'economic prosperity and welfare of the people of Australia'."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Agree

9


Top Economists see no prolonged high inflation, no rate hike next year (Q2)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 2

"When do you expect the Reserve Bank of Australia to next lift its cash rate?"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

.

9

2023


Top Economists see no prolonged high inflation, no rate hike next year (Q1)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 1

"The current combination of Australian fiscal and monetary policy poses a serious risk of prolonged above-target inflation."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Disagree

9

I believe that an independent review of the RBA is necessary. The review should also consider the role of the Australian Prudential Regulation Authority (APRA) in stabilising house prices. The current problem is that the Australian cash rate is consistent with the inflation target and low unemployment mandate. However, this low-interest rate has created a bubble in the housing market which is not consistent with ?Economic prosperity and welfare of the Australian people ? also stipulated in the RBA mandate. APRA should follow a clear rule to move the minimum interest rate buffer using ?House prices inflation-target?. This could substantially reduce the risk of a boom and bust scenario in the housing market by curving house price expectations, helping the RBA to focus only on inflation target and employment. Concerning current inflation, I expect higher inflation until the second quarter of 2022 (temporary shock). Afterwards, most disruptions in the supply chain (which are the cause of high inflation globally) will subside. The RBA reading of this inflation shock is correct in my opinion.


Australia’s top economists back carbon price, say benefits of net-zero outweigh cost

Poll 50

Ahead of November’s Glasgow climate talks, our panellists were asked

"Australia would likely benefit overall from the national economy transitioning to net-zero emissions by 2050"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Government support to develop and roll out emissions-reducing technologies

Uncertain

Government support for research and development of new technologies is critical for a country with large reserves of coal such as Australia.


Promoting vaccination uptake in Australia

Poll 49

"What measures should Australian governments adopt to promote demand for vaccination once supply is no longer a constraint?"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);Mandatory vaccination for higher risk occupations;National advertising campaigns

With more than 2.3 billion vaccines (from different brands) already applied (worldwide), and no evidence of important side effects, there is no good reason to be unvaccinated in a truly global pandemic. People who choose not to be vaccinated are adding an enormous social and economic cost to the rest of the Australian and the global communities. Therefore, policies which restrict the circulation of the virus should be burdened mostly by unvaccinated people.


Policies to deliver higher wage growth

Poll 48

Our panellists were asked

"Higher wages growth is now a top priority of the RBA in its efforts to sustain stronger economic growth. Please identify the three of these government policies you think would best help deliver higher wages growth".  

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

.

Measures to boost productivity growth;Measures to boost business investment;Cutting taxes in order t

Wage?s growth should be enhanced only by an increase in productivity, any other incentive or mechanism to increase wages would be costly for society (e.g. higher unemployment). Microeconomics and education reforms to boost productivity are the key elements to be considered for a long-term increase in wages and productivity growth.


Transition to electric cars

Poll 47

This month, our panellists were asked whether Australia should take action to speed the transition to electric cars.

"As part of efforts to reduce carbon emissions, Australian governments should take action to accelerate the take up, or take no action to accelerate the take up of electric cars"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

.

9

In Australia, the environmental benefits of electric cars are not very well understood: First, about 80% of electricity in Australia is produced using fossil fuels (such as coal, gas, and oil), therefore the benefit of using electric cars is largely offset by the source of electricity production. Secondly, electric cars are substantially less environmentally friendly during manufacturing and at the end of their life cycle (lithium batteries are not efficiently recycled). In short, environmental policies in Australia should focus on producing clean electricity before encourage the purchases of electric cars.


The Federal Budget May 2021

Poll 46

"On May 11, the government delivered a budget designed, in the Treasurer's words, to 'secure Australia's economic recovery and build for the future'.  What grade would you give the budget given that objective, A, B, C, D, E, F?"

Photo credit Wes Mountain/The Conversation, CC BY-ND

 

.

B

In general, the budget was very good. However, I believe that the budget fell short in terms of supporting education (most notably; tertiary education). In my opinion, the challenge for the next 2-3 years will be the unmatched skills in the labor force that most economies will face after the unprecedented disruption caused by the Covid-19 pandemic. Consequently, I believe that countries with more education/skills attained will attract significant more investment in new and emerging sectors (hence economic growth).


Top economists want JobSeeker boosted by $100+ per week and tied to wages

Poll 44

"Ahead of a decision about any permanent increase expected early next year, The Conversation and the Economic Society of Australia asked 45 of Australia’s leading economists where they thought JobSeeker should settle."

Photo credit : Wes Mountain/The Conversation, CC BY-ND

 

Remain indexed in line with the CPI

Jobseeker rates should be sufficient for an unemployed recipient to pay their basic needs, but not high enough to discourage active job hunting. To maintain a low level of structural unemployment increasing rates beyond the pandemic crisis is not recommended. However, it is not clear to me that the effect of the pandemic will subside by march (when the additional support is withdrawn). Regarding indexation, I believe that the cost of living of each state should be considered, therefore the jobseeker payment should be index by the major cities CPI indexes to properly account for the state-specific inflation.


Does the budget rebuild our economy and create jobs?

Poll 43

"On 6 October, the Government delivered a budget designed, in the Treasurer's words, to 'rebuild our economy and create jobs'.  What grade would you give the budget given the objective?  A, B, C, D, E, F"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

B

I think that is a very good budget overall. Although, the funding for education (as % of GDP) still low compared to other OECD countries. Education is critical for long term growth and to reduce long term unemployment.


October Budget 2020 - preferred four programs

Poll 42 

"The October budget will see the government announce additional policies to support recovery.  Please nominate the four programs you think would be the most effective (for an intervention of a given size) over the next two years"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

Bring forward legislated personal income tax cuts, Infrastructure projects, Incentives for renewable energy, More funding for education and training

At this stage of the crisis, is important to consider mid-term policies such as heavily investing in tertiary education to upskilled the labour force. This will be both, efficient (in terms of resources reallocation), but also fair in terms of intergenerational equality. This is because people who get the benefit of upskilling themself will contribute to higher income and taxes in the future.


The legislated increases in compulsory super contributions should...

Poll 41

"The legislated increases in compulsory super contributions, which are set to climb from 9.5% of wages to 12% over the next five years should...."

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

Be deferred

9

This is not a time to encourage saving. It would be a contradiction to have unprecedented expansionary monetary and fiscal policy while increasing superannuation contribution. On the contrary, I think that superannuation contributions should be temporarily suspended until this unprecedented economic crisis subside (perhaps for 6 to 12 months). This will boost the economy in such an unprecedented crisis and will not significantly affect individual superannuation funds in the long run.


Government Debt during the COVID19 Crisis

Poll 40

"Governments should provide ongoing fiscal support to boost aggregate demand during the economic crisis and recovery, even if it means a substantial increase in public debt"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

Strongly agree

9


Social Distancing Measures, May 2020

Poll 38

"The benefits to Australian society of maintaining social distancing measures sufficient to keep R<1 for COVID-19 are likely to exceed the costs"

 

Strongly agree

9

International evidence from Denmark, New Zealand, Honk Kong and Taiwan shows that social distance measure work well, meaning that the economy may re-open relative sooner after strict social distance measures. The social and economic cost of not implementing social distance policies, lead to a much higher cost for countries which delay the social distance restrictions (e.g. Sweden, Russia, the U.S. amongst others). The reality is that there is not health system prepare for such as severe pandemic, and therefore social distance measures are required. The relaxation of these measures should be gradual, and some outbreaks are also expected in the process, as we learn more about the virus.


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 -Uncertain (neither agree nor disagree)

6

Part 2 - Uncertain (neither agree nor disagree)

6


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."

 

Disagree

8

Increase competition: I believe that more competition from international banks is a key factor to improve good behaviour from domestic banks as in general international banks have tighter internal regulations to ensure all branches worldwide complaint with domestic regulations. The concentration of the financial industry in Australia is not helpful to protect retail consumers. Refine regulations: We all know that regulations and markets are not perfect, and constant review of good practices is a key element to ensure better consumer protection. Although, misconduct exist in almost any sector; it is important to note that things have improved substantially over the long period. In this sense is important to have historical perspective.