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Author's Name: Mala Raghavan
Date: Tue 04 May 2021

Mala Raghavan

Mala Raghaven

Mala Raghavan is a Senior Lecturer in Macroeconomics and the Head of Discipline (Economics and Finance) at the University of Tasmania, and a Research Associate of CAMA, ANU. She was a Visiting Research Fellow of the Bank Negara Malaysia (BNM) until 2017 and has been a Visiting scholar to World Bank (Malaysian Hub). 

 

Mala's research and teaching interests are in the areas of Macroeconomic Policies, Monetary Economics, International Economics and Development Economics, with a particular focus on Asian and Emerging economies. Her research agenda is mainly to understand the dynamics of global economic and financial integration, the effects of various international shocks on small open economies, and the effectiveness of macroeconomic policies in mitigating these shocks. She holds a PhD in Econometrics from Monash University and has published several articles on international economics and macroeconomic policy issues and has recently co-authored a book titled "China and ASEAN: Pivoting Trade and Shock Transmission".


Responses (9)


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"

 

Uncertain


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"

 

Uncertain

8


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"

 

.

8

2024


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

8

There is a possibility the RBA will start increasing the cash rate either in late 2023 or early 2024. I trust the RBA tried its best to achieve price stability and low unemployment. However, I am not sure if the continuous accommodative monetary policy measures implemented in the last five years provided equitable economic prosperity and welfare outcomes for many Australians. It is probably a reasonable idea to commission an independent review, to objectively scrutinize the decisions made by the RBA board. However, the challenge is finding the right mix of reviewers, who are independent and free from any political and commercial/industrial baggage.


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

Agree

It is frustrating to watch Premier Morrison and his government not firming up their commitment to achieving net-zero emission by 2050 and even more frustrating to note their assertion that Australia will continue to mine and sell the fossil fuel overseas well beyond 2030. Australia has the means, resources, and expertise to move closer to the net-zero emission target. What is lacking is the ?political will?. In some areas, Australia is attempting to take the appropriate actions, such as the move towards cleaner energy and take-up of electric motor vehicles. However, we are moving at a snail phase, and we are nowhere near closing the net-zero emission gap by 2030 or even 2050. Political decision-makers need to understand and educate the general public that we need not compromise on economic growth to solve the climate problem. Economic and environmental performances can go hand in hand where the environmental policies and the progress towards investing in negative emission technologies can be important drivers of economic growth for Australia. Taking a strong stand on emission reduction by 2030 is not sufficient. Government should play a significant role in the continued innovation of emissions-reducing technologies to secure investment for their development and market uptake. Though the measures to develop and roll out these technologies seems like a massive challenge, the costs of not acting can be way more expensive in the long run. Environmental scientists are continuously warning us, and in the past few years, Australia did experience many catastrophic events.


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

I believe mandatory vaccination is needed for high-risk occupations such as the health care and hospitality sectors. For the matter, people in any occupation that has direct contact or exposure with the masses should vaccinate. It is essential, the workers are protected and do not pose risks especially to the vulnerable members of society. Resistance to vaccinating is generally due to lack of information and misinformation, or due to the tedious nature of the vaccination process. To achieve sufficient vaccination coverage, it is, therefore, necessary to understand the reasons for the lackadaisical behaviour. A clear national advertising campaign should be complemented with some softer advertising campaigns and actions targeted at specific groups. For example, in areas or communities of high resistance, we need to identify: (i) a respected local hero as ?vaccine ambassador? (ii) popular local businesses and or community groups as ?influencers? who can promote and spread the benefits of vaccinating as opposed to not vaccinating.


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;Reforming industrial rel

To maintain sustainable growth in wage rates in Australia, we need to address the structural issues related to wages and salaries. Over the years, we have been observing uneven development in the salary scheme of people in different income groups and levels in the organization. The huge expansion in wage growth is observed for those at the top end (usually a small group) of the organization, while the wage growth for some others is only inching slowly and for many others hardly moving. he upward trend in the casualization of the workforce, mainly in the service-related sectors, is another crucial factor contributing to the sluggish wage rate. In addition, sectors that are major employers, such as healthcare, education, child care, construction, to name a few, are not great paymasters. These trends appear to have significant spillover effects on wage rates in other sectors. Therefore, Australia needs reform in the employment and wage structure.


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"

 

Subsidise public charging points for electric cars, Set a date to ban the import of petrol and diesel cars, Make charging points compulsory in new homes and new carparks

7

Electric cars do reduce harmful exhaust emission and improve air quality, which can help to decrease our exposure to adverse health outcomes. Though electric cars help to reduce air pollution, they still create greenhouse gas emissions if the source of energy to power these cars come from the electricity grid generated from fossil fuels. Further, all vehicles (irrespective of conventional or electric) produce substantial life cycle emissions such as vehicle production, processing, and distribution. Therefore, to reduce Australia?s carbon emissions and to realize the long-term benefit, the push to take up electric vehicles should be complemented with the push to switch to renewable energy such as solar panels, wind turbines or hydroelectric. These moves are essential for Australia to keep its greenhouse emissions below the ?carbon budget?.


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

The government?s focus on supporting the service sectors such as aged care, childcare, mental health, and women?s health and safety; and the provision of JobTrainer funds to these areas are commendable. A big tick for that. However, the government failed miserably on other key areas such as funding for the environment and renewable energy. These are vital sectors to achieve Australia's long-term sustainable development goals. Government shows no mercy to the bleeding higher education sector and there are also not many other attractive schemes in the budget for the development of young people. Youth upskilling and reskilling are crucial as they are important human capital pillars of this nation. The government is criticized for not supporting international tourism. Given the uncertain environment, it is wise to restrict international travel to Australia, until the majority of the population are vaccinated. Australia?s recent economic performance is admirable, and it demonstrates the importance of containing the spread of the virus to achieve health and economic benefits. To ensure the survival of the tourism sector, the government could work with tourism operators to create international travel bubbles from low-risk countries while the state governments could continue to provide incentives such as travel vouchers to encourage domestic tourism across states.