The World this week with ESSA

Hand picked selection of economics content from around the web.

This week: Austerity is supposed to reduce debt and stabilise recessions – but has it worked? Also why Australia’s macro policies have been successful, and the case for legalising prostitution.

ESSA, 14 October 2012

Around the world

Japan and South Korea Seek to Strengthen Economic Ties – New York Times

For those following the ongoing tension in the far east, it’s interesting to note that Japan and South Korea are moving towards closer economic ties, potentially as a precaution against possible Chinese truancy at the negotiating table. However there’s more than meets the eye here as the historical grievances between Korea and Japan also has potential stability implications for the region.

The end of Austerity?

Austerity Fails Europe – Live Trading News

Readers of the International Monetary Fund’s October World Economic Outlook will look to forecasts on Europe’s growth, for this year and Y 2013. A Key item that stands out is that the contraction of GDP in some nations in the region is so large that almost no amount of austerity will close budget gaps, especially in Spain and Italy. Does this signal the end of the use of Austerity as a cure for Europes debt woes?

World Economic Outlook (WEO) – The IMF

For those interested, this is the complete Economic Outlook report published by the IMF as mentioned in the above article.

IMF forecast leaves chancellor in a fix – FT

Following on from the IMF’s report, a similar debate has been raging on in the UK – should Chancellor of the Exchequer George Osborne end his Austerity plan in order to restore the UK’s economic recovery? A detailed analysis of the arguments for and against.

Women are paying the price for economic austerity – The Conversation

Since 2010, many European governments have adopted austerity policies in an attempt to reduce the budget deficits and increases in government borrowing that were caused by the 2007/8 financial crisis. A study in the UK concludes that austerity policies have caused the most economic damage to women, among other undesirable economic outcomes.

Here in Australia

RBA now controls the economics of next year’s federal election – Crikey

The economic environment in which next year’s federal election will be fought will be affected in large part by how the RBA responds to a worsening international situation.

Local economy ‘still a pretty good bet’ for investors – ABC

VIDEO Economists and columnists including Stephen Koukoulas, the managing director of Market Economics who was also a panelist at ESSA’s Q&A discuss the state of the Australian economy and conclude that it is still a ‘good bet’. Watch the whole interview to find out their reasoning.

Australia reaps the benefits of perfect policy – Business Spectator (Free registration required)

In a hurry and don’t have time for a 10 minute interview? Read on for Stephen Koukoulas’ discussion of how Australia’s Macroeconomic policy in recent times has contributed to a stable and prosperous economy.

For your interest

Facing Crackdowns in the E.U., Hookers Find Sanctuary in Switzerland – Time

Geneva: one of the world’s most expensive cities with a peculiar tolerance for the world’s oldest profession: sex workers.  As other EU countries such as the Netherlands and France tighten laws around prostitution, Switzerland is going in the other direction: it has allowed a trade union for sex workers to be established in order to work out how to improve work conditions and the earning potential of its registered members. Do the benefits outweigh the costs?

See you next week!

The ESSA team