Economists as a whole are notorious for their poor forecasting predictions, which is why the saying “economists predicted nine out of the last five recessions,” is so well known. Economic forecasting is no doubt a difficult task. There are those few economists who are known for ‘getting it right’ or perhaps are just plain lucky. Neither obtaining an economics degree nor working as a professional economist can guarantee success. Of course, no forecasts are 100% correct and we can expect small errors in the numbers. However at times these forecasts are the opposite of actual outcomes and we experience unexpected economic meltdowns like the Global Financial Crisis and the Euro Crisis, during times when economists had predicted strong robust growth. So it isn’t a surprise that the credibility of economists as a whole has come under fire these past few years, and that economic forecasts are taken less seriously than before.
In microeconomics, the first thought that springs to mind when we talk about perfect substitutes is Coca-cola and Pepsi. Since these two essentially taste the same and have similar pricing, we would expect that demand for both products are similar. However, until recently, the market share for Coca-cola and Pepsi has heavily favoured Coca-cola in Australia. It is estimated that Coca-Cola outsells Pepsi Cola by around three times in Australia and New Zealand supermarkets, and around five to six times in the whole cola market.
As the mining boom has played a pivotal role in Australia’s current economic situation, it is not surprising that the majority of business headlines are dominated by information and debates about the mining industry particularly iron ore. Not too long ago you may have come across headlines about a state owned Chinese steel maker called Wuhan Iron & Steel corp. diversifying to pig farming. Perhaps a bit amusing at first until you realize the seriousness of the decision and the plausible rationals.
We are all aware about the mining boom going on in WA and QLD, and the other states trapped in the slow lane of the 2 speed economy, patiently waiting for the supposed income flows from the mining boom to come. The RBA seems to always be optimistic that the boom will stay strong and the income and prosperity will spread to the other states eventually. The government has attempted to help out with the Minerals Resources Rent Tax. Theoretically economic flows can be felt widespread under normal circumstances however the effect of the Global Financial Crisis plays a major role in why we have a 2 speed economy and how it is constraining the flows from the mining boom to the rest of the economy.
We’ve all had our fair share of frustration with the persistent under-performance of Metro trains; there are far too many problems and disruptions that could possibly happen during day to day travel. From rampant peak hour delays, overcrowding, infrequent services and train cancellations to signalling faults, waiting for V-Lines and unfortunate but very disruptive train-pedestrian collisions. Our frustrations don’t end there.
China’s ‘One-Child’ Policy was introduced in 1978 to alleviate the social, economic and environmental problems created from a baby boom in the 1960’s, such as overcrowding, strain on social services, strain on ecosystem and high unemployment from excess labour supply. However it has also created unintended consequences associated with imbalance in gender ratios and in population demographics.