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.
On Thursday the 19th of September the University of Melbourne hosted the inaugural John Freebairn lecture titled ‘Governing the ungovernable: the market, technology and you’, presented by Professor Stephen King from Monash University. I had the opportunity to attend what was an insightful lecture about how the growing complexity, pace of change and use of technology has brought about a conundrum for market regulators. Stephen King’s speech was broken up into three parts: how regulation has adapted in the context of new technology, how some of the old rules will need remaking as technology has changed many business models, and finally regulating big data and the information revolution. This article will provide a recap of the lecture for those who could not attend the event.
Rare earth metals are versatile elements which are central to the modern era and future technological advances. We commonly recognize their existence through use in things such as iPads, plasma TVs and solar panels. Yet it also has a wide range of applications in other sectors such as industrial/manufacturing use as well as military component production and nuclear medicine, which have then given rise to things like fibre-optic technology, advanced batteries, high tech lasers and so forth. Given its importance in providing a new frontier of innovation in the modern economy, it is no wonder the world is concerned over China’s export quotas and production restrictions that have been in place from 2009 to now. This article will analyse the rationale behind the policy.
Even wonder what happens when a city goes bankrupt? Does a form of government even control the city anymore? Other questions such as who provides the public services or do the residents still pay tax also come to mind. Since the city of Detroit filed for Chapter 9 bankruptcy protection on the 18th of July 2013 at an estimated $18 billion worth of debt, I guess it is worth talking about it how it could pan out.
From the earliest forms of technology such as spears and knives which led to more efficient hunting, to the advent of manufacturing during the industrial revolution, followed by various inventions such as light bulbs, computers and even cars over the 20th century, technological progress has vastly contributed to the development of our economies and subsequently our material and non-material living standards. Fast forward to today, we continue to see improvements in existing technology, from the latest computers to new inventions previously not even dreamed of, like solar panels and online shopping. In short technology is the result of expanding innovative ideas that build on existing ideas. We see this in cars, which were modelled off of steam engine mechanics, which themselves were built from pre-existing technologies (from basic metals to even the wheel). Given the increasing speed at which technology is progressing, one of the major concerns people have is how technological progress will impact jobs in the future.
Globally we produce electricity from a diverse range of energy sources, from fossil fuels such as coal, oil and natural gas, to renewables such as solar, wind, hydro, geothermal, and biomass. Finally nuclear energy hovers as an alternative with its own risks that belongs in neither camp. The problem is that there isn’t one energy source that can be described as clean, reliable, safe and economically viable. We are unable to cut our dependence on fossil fuels to provide base load energy to power our current and future economies. Michio Kaku, theoretical physicist and futurist states the attraction of fossils fuel succinctly: ‘pound for pound oil and coal contain the most energy in a convenient form than any other energy source on the planet. This is due to the fact it is essentially highly concentrated amounts of sunlight compressed and refined over generations, it pollutes like hell but is very efficient.’
With massive technological advances, it is safe to say that through growing ease of access we have all pirated copyright material such as music, TV shows, software or movies in one way or another. Whether we have downloaded it ourselves through direct download sites and peer to peer networks, or perhaps received a copy from a friend or even used some other elaborate method to avoid paying for it, the logic of pirating is simple: why pay so much more for something that is readily accessible at near free of charge price.
If we remember back to the days of the global financial crisis, one of the earliest and hardest hit countries in the European area was Iceland. Iceland was also the only country which made the fateful decision to not bailout the three largest banks in their country. This was not because they simply said ‘no’ like they did afterwards to the demands of the creditors of these banks in the UK and the Netherlands, but they simply could not afford to bailout these banks which held 10 times GDP worth of assets. By choosing not to bailout the banks it didn’t mean the domestic financial payments system collapsed as well, and without good reason detailed further in the article.
If I were to use an analogy to demonstrate the effects of monetary policy and fiscal policy on the economy I would first say the economy is much like a car and GDP is much like the speed at which the car is driving at. The key assumptions are that the car is driving on an infinitely straight highway and it is equipped with 2 accelerator peddles each with its own gearbox. Why 2 accelerator peddles?
Freshly built from government stimulus funding, the new district of Kangbashi in the city of Ordos in China is brimming full of sky high apartments and shiny new infrastructure. Yet since its construction the town remains largely uninhabited and untouched.
It is known as ‘the ghost town,’ with only about 30,000 residents despite a housing capacity of one million. Few residents have chosen to move from the thriving old city district in Dongfeng just 30km away.