It is unambiguous that the Australian economy is in an enviable state. All the key parameters—inflation, unemployment, growth—are more or less where we want them. However, where Australia falls away from being a world leader is in the often forgotten measurement of underemployment.
A recent Business Insider article detailed how the Goldman Sachs managed to solve the long tolerated issue of lunchtime cafeteria crowding (unrelated humour-plenty Goldman Sachs video). The analysts at the Goldman Sachs had identified that during the typical midday hunger-period of 11:30am to 1:30pm, the cafeteria was crowded, lines for food collection were long and stagnant, and for the average Goldmanite this was an inefficient use of their time.
1.2 billion people around the world, or roughly one in every six people, live in extreme poverty – defined as survival on less than $USD1.25 a day according to The World Bank. As a proportion of the global population, however, this number has fallen dramatically over the past few decades. The economic uprising of several key East Asian nations has resulted in over 700 million people, over the past twenty years, breaking free from extreme poverty. Organisations such as the UN have project further decreases in the years to come. Indeed, there are many political, economical, and environmental factors that contribute to the extreme impoverishment of individuals around the world and many argue that this is a deeply complex issue that we cannot afford to merely throw money at – or can we?
On September 7th 2013, the International Olympic Committee (IOC) announced to the world that Tokyo would be the host for the 2020 Olympic Games, much to the sorrow of Madrid and Istanbul. It certainly wasn’t the most competitive candidate pool in recent years; Spain was in severe economic recession and boasted a 27% unemployment rate, while Istanbul’s reputation was tarnished somewhat due to a mixture of anti-government protests back in June, the bloody Syrian civil war, as well as a string of doping scandals among Turkish athletes.
The 2013 Nobel Memorial Prize in Economic Sciences was announced on October 15 and won by a trio of financial economists: Eugene Fama, Robert Shiller and Lars Peter Hansen. Fama is the mastermind behind the ‘efficient-market hypothesis’, which will be familiar to all who have taken at least a first-year finance subject, whilst Shiller is a primary critic of the hypothesis and instead espouses the idea of ‘irrational exuberance’ in markets (read: stock markets are generally overvalued as investors underestimate the risk of incurring a loss).
This semester I took part in an exciting program run by the Monash Law Students’ Society revolving around social justice and leadership. The group I was part of looked at homelessness in Australia and I focused on housing affordability. In this article I will consider the economics of this social justice issue.
The Comprehensive Plan of Action for Indochinese Refugees (CPA) has been praised for upholding ‘international solidarity’ and responding to what was the burgeoning refugee crisis of 1989. It has also been criticised for its execution, with critics arguing that it is an example of international buck-passing and questionable compromises. Regardless, the CPA has since affirmed itself as a practical model that allowed policy makers to combine humanitarian principles of compassion with political pragmatism.
WHY does a case for economics need to be made in the first place? Surely economics is the foundation discipline for studies in business, finance, accounting and related fields. Acknowledged as the queen of the social sciences, the scientific community recognises the value of the discipline with the award of Nobel Prizes.
With the US debt ceiling talks and the new Chairman of the Federal Reserve (Fed) Janet Yellen dominating the business and economics headlines, the economic woes of the US are back in the spotlight. It reminds us of the sluggish and vulnerable economic recovery that the US is currently facing on the back of ongoing Quantitative Easing (QE) monetary stimulus. Despite the debt standoff and the likely continuation of QE as Yellen leans towards employment over inflation, what is still a looming concern is the eventual exit of the QE program by the Fed. Due to the risks of a disorderly exit, the process is made more complex as timing, pacing and communication all need to be carefully managed, and both implications for the US economy and the potential collateral damage around the world need to be considered.
A typical approach to analysing markets for goods or services is to think in terms of supply and demand. Even to those who have not studied economics, the idea that a market equilibrium price and quantity occur where supply equals demand is likely to sound familiar. But there is a more subtle and fundamental concept that often eludes even those who have studied economics: elasticity.
In the mid-2000’s Spain embarked on a solar power revolution: 2008 alone saw solar-energy capacity increase by 400%, accounting for half of the world’s new solar-power installations[i]. Yet five years on, many of Spain’s solar-energy companies are on the verge of bankruptcy as revenues and demand plummet. What happened to cause such a rapid fall from grace in the industry once dubbed ‘renewable-energy’s Cinderella’[ii]?