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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.
"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"
"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'."
"When do you expect the Reserve Bank of Australia to next lift its cash rate?"
"The current combination of Australian fiscal and monetary policy poses a serious risk of prolonged above-target inflation."
A simple "yes-no" answer to question 3 about RBA performance does not make sense.
On balance, the RBA did more of a good job than a bad job, but it consistently over-estimated wage and price inflation, implying that unemployment was higher than necessary, and this probably impacted investment and productivity.
No-one can know whether a Review of the RBA is a good idea without seeing the terms of reference.
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"
An economy-wide carbon price (either via a cap-and-trade scheme or an emissions tax)
Using the price mechanism will always ensure a more efficient allocation of resources than the government attempting to second-guess the market.
If the market on its own has unacceptable social impacts then these can be offset by increased government support to help people make the transition to a low-carbon world.
"What measures should Australian governments adopt to promote demand for vaccination once supply is no longer a constraint?"
Mandatory vaccination for higher risk occupations;Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);National advertising campaigns
While I favour both mandatory vaccination and vaccine passports (in due course) these measures will not be appropriate while there is a shortage of vaccination slots.
I also think it is too early to decide on whether or not, incentives are needed.
They may be appropriate later on if it proves difficult to encourage sufficient numbers to come forward for vaccination.
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".
Maintaining high government spending in order to boost aggregate demand;Cutting taxes in order to bo
Boosting aggregate demand will help increase wage growth, but I think there are also structural reasons why wage growth is less than in the past.
In particular, the impact of technology hollowing out of middle-level jobs has weakened the power of trade unions, and also wage expectations have now fallen.
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"
Make charging points compulsory in new homes and new carparks
I think electric cars will be competitive with petrol and diesel cars, so I don't see any further subsidy as being necessary or appropriate.
However, I would favour the government moving to change its own car fleet over to electric cars as soon as possible.
"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
This budget deserves a B+ for securing the economic recovery, but only an E- for building for the future, resulting in an overall D rating.
This budget does not address the causes of Australia's economic stagnation prior to the pandemic.
Negligible real wage growth is forecast to continue, and the forecast increase in productivity to 1.5% in 2022-23 and beyond is an heroic assumption.
Restoring past rates of economic growth will not be possible without addressing the structural problems in the labour market.
This will involve much more investment in education, training and research. But the universities are experiencing a major funding cut, and the extra money in this budget for apprentices and trainees only makes up for past cuts.