Date & time
Why is macroeconomic policymaking in Australia generally seen as successful by observers in the rest of the world? Professor David Vines will explore the radical shift in thinking about open- economy macroeconomics which has taken place in Australia between the 1920s and the present. This story began with an economy on the gold standard, with a protectionist trade policy, and with centralised wage fixing; an analysis of this process was set out in the Brigden Report of 1929. This led by the late 1940s, to a Keynesian policy in pursuit of all of full employment, price stability and external balance by means of fiscal policy, centralised wage fixing and the pursuit of external competitiveness by means of protectionism or exchange rate adjustment. That set of ideas was formalised in the 1950s by Trevor Swan and others at the ANU. Economic growth was to be pursued through migration accompanied by sufficient savings; Swan’s growth model showed how this might be done. Analytical thinking, and policymaking, moved away from both protectionism and centralised wage fixing from the 1970s to the 1990s, towards the present system of inflation targeting, in which the exchange rate is floating, and fiscal policy is governed by the need to ensure sufficient national savings. The seminar will describe how the moves took place from one set of ideas to another, and will aim to show how this made good policymaking possible. In doing this, Professor Vines will present an outline of a book which he is writing on the development of macroeconomic analysis in Australia, focusing on Australia’s position as a small open economy and on the reasons why macroeconomic policymaking in Australia has been successful.
David Vines is Emeritus Professor of Economics and Emeritus Fellow of Balliol College at the University of Oxford. He is also the Director of the Ethics and Economics Programme at the Oxford Martin School and a Research Fellow of the Centre for Economic Policy Research in London. From 2008 to 2012 he was the Research Director of the European Union’s Framework Seven PEGGED Research Program, which analysed Global Economic Governance from a European perspective. David received a BA from Melbourne University in 1971, and subsequently an MA and PhD from Cambridge University. From 1985 to 1992 he was Adam Smith Professor of Political Economy at the University of Glasgow. His main research interests are in macroeconomics - including fiscal, monetary and financial policy - and in global economic governance. His recent books include: Keynes: Useful Economics for the World Economy (MIT Press, 2014, with Peter Temin); Capital Failure: Rebuilding Trust in the Financial System (Oxford University Press, 2014, edited with Nicholas Morris); The Leaderless Economy: Why the World Economic System Fell Apart and How to Fix It (Princeton University Press, 2013, with Peter Temin).
The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.