Date & time
Tuesday 02 March 2010
Acton Lecture Theatre, #132 JG Crawford Building, ANU
As a gold and resources economy, Australia has always had a mild case of the Dutch disease, which is resource wealth accompanied by consumption exuberance but followed by higher exchange rates, international uncompetitiveness and job loss. Authors Edmund Phelps (Nobel Prize) and Leo Tilman recently argued that America caught the same disease but nobody noticed because of the housing bubble. America is now faced with 10% unemployment, or 17.4% on the broadest definition, which is the highest since 1930s. One in eight Americans and one in four children are living on food stamps. Australia’s Cutler Report found that Australia ranks low to mid-range on many OCED indicators of productivity and innovation. Cutler found that economic policy needs to address productivity, together with social inclusiveness and environmental sustainability. By mid-2010, the primary benefits of global stimulus will begin to pass for Australia and its trading partners and the enormity of its servicing cost will become a reality. Therefore the search for industrial policies that rebuild manufacturing ?mojo? so people have jobs and can afford the consumption vector will become a priority. In particular, a search for ways to understand emerging global constraints as an opportunity for industry expansiveness will become a major new strategic policy imperative. In making these arguments the presentation will outline a Computable General Equilibrium model that is quite different to the mainstream and marries networked technology with neoclassical economics in the presence of geophysical global warming constraints.