Posts Tagged ‘Keynesian economics’

Ruddonomics: the “crisis”

February 21, 2010 1 comment

In his infamous Monthly essay “The Global Financial Crisis“, Andrew Charlton Kevin Rudd uses the word “crisis” 14 times within three paragraphs. Scary stuff.

But my complaint about the essay is not the fear-mongering. That’s fairly standard in politics. My complaint is that Rudd simply gets the economics wrong, time and time again, starting with the second paragraph reference to “fundamentalism”.

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What would have been

February 11, 2010 3 comments

UPDATED: 16 February 2010

The government often claims that they saved Australia from recession, and they base this claim on some Treasury modelling.

The Treasury often does very good work, but I think that some people fall into the trap of assuming that Treasury is some sort of gold-standard of economic forecasting, when the truth is that their track record is mediocre. This is not intended as a criticism of Treasury, but of people who put too much faith in Treasury. Forecasting is a tough game, and economic models only ever provide a rough guide. I should know — I used to do forecasting for the Commonwealth Treasury.

So instead of assuming¬†Treasury is right, I thought I’d make use of the last year’s extra economic data (Treasury’s budget papers and the National Accounts) and try to work out what actually would have happened without the government’s two stimulus packages.

I’ll jump straight to the conclusions.

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