economy

National | World | Economic History | Pop Eco | Interactive Articles

Hosting the Olympics – a winning strategy?

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.

Read more

Out of their league

One of the things that struck me most while on exchange at the University of North Carolina (UNC) is that it really is like being in a movie. While there are no meticulous canteen table partitions according to social status, on the playing field, which is where college spirit bursts forth – in the same zeal as American patriotism – the image is exactly like those scenes in Remember the Titans, Rudy, The Blind Side, etc…

Read more

The US government shutdown – any end in sight?

What a joke.

Really, there isn’t anything else that can be said about the latest fiscal crisis in the United States. With the federal government shutting down most operations on the 1st of October, as the House of Representatives (controlled by the Republicans) and the Senate (controlled by the Democrats) couldn’t agree on a Continuing Resolution for the 2014 fiscal year.

Read more

Calling for change

The recent historic telephone call between the presidents of the USA and Iran the other week represents a huge step forward for both countries and the wider international community. This first contact between the two nations’ presidents for decades was a forceful step away from the ‘Great Satan’ vs. ‘Axis of Evil’ rhetoric that has dogged diplomatic relations. There are reasons to be optimistic over this symbolic phone call – a call for change, if you will.

Read more

The economics behind China’s rare earths restriction

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.

Read more

The end of good times? The mining boom re-examined

This article is one of two Q&A specials informing the reader on a topic of economic importance to Australia that was discussed by the panel on the night.

In the past few years Australia has experienced one of the longest and largest increases in the value of the mining sector, seeing it grow to account for approximately 52% of all exports produced by Australia and worth $164 Billion a year[1]. Similarly, mining related investments in Australia now comprise some 40% of all investments undertaken, up from 10% before the boom and accounting for $80 billion a year — more than any other country in the developed world.

Read more

Testing the means-testing debate

This article forms part of an ongoing series looking at economic issues as Australia heads into the Federal Election. More coverage can be found on the Election 2013 page of ESSA’s website.

One of the greatest accomplishments of the 20th century was undoubtedly the conceptualisation and implementation of what has become known as the ‘welfare state’. The term is generally not used in any exact way, rather in a vague and imprecise manner with an overarching theme of the government having a degree of responsibility for the health and social well-being of the population.

Broadly speaking, the two extremes of the potential function of the welfare state are universalism and selectivism. Universalism, as the name suggests, refers to universal access to welfare programs regardless of an individual’s wealth. Selectivism is the opposite, with welfare ‘means-tested’ and distributed based on an individual’s needs.

Read more

Small Man Syndrome

The Federal Government recently announced measures to assist Australian farmers in restructuring their debt and to invest in productivity. Among the measures include concessional loans of up to $650,000 for debt-ridden farmers.

The announcement came just days after the premier of WA rejected calls by the state’s farmers for further financial assistance from the state government.  Premier Colin Barnett suggested that some farmers “probably need to leave”. Moreover, according to the Director of the Bankers’ Association, to some “things aren’t too bad” for farmers, and believes that the recent measures are merely to replace the Exceptional Circumstance assistance scheme.

Such comments have not gone down well with farmers.

Read more

The Economic Cost of Child Abuse

It is often said that an affluent society is best judged by how it treats its most vulnerable citizens. This honourable barometer tends to bring to mind notions of charity and generosity rather than a contemplation of the broader social benefits of investing in the underprivileged. When in fact, expenditure directed towards the disadvantaged has far-reaching economic and social returns that often go unconsidered.

Funding for addressing disadvantage is too often placed in the basket of ‘social programs’, which gives the community the erroneous impression that it has nothing to do with the economy. However, as proponents of the proposed National Disability Insurance Scheme will tell you: it’s not about philanthropy, it’s about investing in people through empowerment and participation.

Read more

The Australian F1 Grand Prix: Melbourne’s Economic Failure?

The Pirelli was skirting once more at Albert Park, last week, as the 2013 Australian Grand Prix arrived on its yearly visit. The high-octane event has been carried out in Melbourne, ever since it was moved from Adelaide in 1996. However, it wasn’t just the rain which dampened some people’s enthusiasm for the event. As is increasing the case each year, the media and variety of parties with vested interests were steeped in debate over whether the F1 Grand Prix is in fact economically viable.

According to a report tabled in the State Parliament, the Victorian taxpayer is losing over US$34 million to the event; most of which, is going to president and CEO of F1 Management, Bernard Ecclestone, just for the right to host the event.[1]

That’s a lot of opportunity cost in government expenditure!

Read more

It’s Politics, Stupid

by Amal Varghese

SYDNEY- Before David Axelrod- one of the finest political strategists in modern American history- there was James Carville; the man who played a big hand in Bill Clinton’s rise to the White House. His greatest achievement was touted as devising the catchphrase for the campaign ‘The Economy, stupid’, which was modified after it caught on fire to ‘It’s the Economy, Stupid’. That mantra highly resonated with American voters who were gradually convinced by the Clinton campaign that George H.W Bush, despite ending the Cold war and coming out a victor in the Gulf War, was not the man who could turn the downward-spiralling economy around. The year was 1992, and in the decade that followed America grew at an average of 3.8% GDP and managed to balance its budget for the bulk of that time under Clinton. The divides that are a caricature of Washington today were present back then (though perhaps the climate was not nearly as polarized) but political leaders found a way to come together and carve a future path for growth. In the decade and a half that followed Clinton’s exit from Pennsylvania Avenue, America’s deficits have ballooned to over US$16 trillion, its growth prospects remain bleak nearly five years after the financial crisis and political paralysis has become the hallmark of Washington. But in stark contrast to the 1990s, America’s deepest problems today are rooted in politics, not economics.

Read more

If the Economy was like a Car

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?

Read more