In light of ESSA’s upcoming Q&A event, this article will explore some of the effects of Australia’s two-speed economy and how it relates to the wider notion of a ‘resource curse’, ultimately branching out to include some of the social and political consequences often befalling countries which own large amounts of natural resources. From a brief overview of Australia’s current macroeconomic situation, the more unsettling aspects of a resource boom will be considered in the context of some developing nations, often regarded as examples of economic and political mismanagement.
Many of you would be aware that ESSA is hosting a Q&A event on the evening of Thursday August 16th, where our brilliant panel will be answering questions on immigration and the two-speed economy. In honour of Q&A, I have decided to continue my series on structural changes (read the first installment here) with an analysis of the two-speed economy. This article attempts to provide a snapshot of the key issues surrounding our two-speed economy and the main policy implications. I also consider some of the potential questions that our panel may be forced to contend with on the night!
The focus of my final post will be the first session of the ACE Business Symposium, titled ‘Structural Adjustment: The Dutch Disease and Public Policy in Australia’.
The session opened with a methodical and articulate speech from Professor Max Corden of the University of Melbourne, summarising his findings in a recent paper for the Melbourne Institute. He defined the term ‘Dutch Disease’ as the real appreciation in the home currency, which has both positive and negative effects, depending on the industry.