Lets talk economics... (1 Viewer)

[Q2C-ME]

im bored and this is a good way of updating yourself...

Rudds bank depoist is reflecting regulatory changes to heighten confidence, but is it to late?

 

[RohanZ]

hey one question, what are the main effects of reducing the general level of protection on the aus economy?

 

[Q2C-ME]

hey one question, what are the main effects of reducing the general level of protection on the aus economy?

according to syllabus its basically lyk this:

• Individuals: short term unemployment, or structural unemployment due to the cessation of inefficent industrys and a more efficent allocation of resources will lead to long term employment however. Furthermore, individuals who also act as consumers will see heightened levels of purchasing power parity through improvments in consumer soverignty due to a competitive international market place with generally lower prices
• Firms: one of the most varied aspects, often firms inefficent or heavily subsidisde firms will become inefficent and non existent. In terms of australia we have seen that motor industrys and textiles particularly finished products have gone into liqudiation or become redundant. Generally however australia has experienced a transition to more efficent markets for e.g. minerals e.t.c but even then economists argue that this is factor endowment not a reducion in protection. Nevertheless it is clearly evident that firms who are affect undergo transition and achieve economies of scale, such is clearly present in the services sector which continually reflects australias well skilled labour resource
• Governments: the effect for governments is double sword, because on the one hand they loose tariff revenus, whilst on the other they experience cuts in subsidy payouts. So governemnts find it a bit in the middle, um it does create unfavourable conditions for them, and such is evident due to australias short term politcal cycle.

ummm...its a very narrow question, but you can go beyond the syllabus

for e.g. a reduction in protection can see more co-oridnated international policys which will assist australian economy in achieving more enviromentally responsible growth, leading to sustained economic development

 

[RohanZ]

ah cheers, mate. =D

 

[2162]

why not use the marathon thread, anyway what are the risks and benefits of integrating into the global economy?

 

[Q2C-ME]

why not use the marathon thread, anyway what are the risks and benefits of integrating into the global economy?

because im lazy...and i dunno, ive never been fond of "marathons"...im an economist

ok...

Basically, ill start by saying "intergrating" in the global economy, the terminology should be international convergence as this covers an array of things such as similar finanical systems e.t.c, and its the more technical words which every prominet economist is using...okaii well in terms of risks theirs are plenty. Many economys have what is called a correlation co-efficent of growth, for e.g. for every 1 point of growth lost by the US, australia will loose approximently 0.65 (RBA calculation) so bascially a downturn in one economy arises in another due to the sameness of financial systems. This can be further corrobrated throught the international business cycle, and more significantly Real GWP both which is adjusted for exchange rates and inflaiton. Um furthermore, the tendancy of trade for e.g. one nation to have reduced domestic growth will lead to reduced external demand and hence the economy exporting to them will suffer in sales.For e.g singapore is one of the most dependant nations in the world and is suffering immensly as 70% of its GDP is based upon its external trade system. Often international convergence results in similar financial systems...and this cann be further corrobrated throught the washington consesus, which was basically a policy which many economys have adopted in order to create more "efficent" finaical system, the most recent example is that the UK have heavily created their system based upon this and therefore have suffered in the recent sub prime mortgage crisis ( short selling for e.g.). other risks are that TNC's a charateristic of international convergence will tend to use their influence for "coprate gains" seeing reduced minimum wage stanrds and less wage growth reflecting a possible redcuction in the standard of living, note please that this argument is superfical.

In terms of befits they are paramount, and any basic ecnomic textbook should cover them...and will b mentioned in the next edition...stay tunned
i would however recommend thatn you mention something like " enviromental mangement can be benefical due to the unity and heightened co-ordination between economies, such is evident through the kyoto protocol e.t.c e.t.c) it just seperates you a bit from the rest of the hsc herd

 

[2162]

good explanation, what does it mean for everyday people

 

[BackCountrySnow]

Rudds bank depoist is reflecting regulatory changes to heighten confidence, but is it to late?

No, I don't think it is. I mean, there aren't a lot of economies which have done this. We are one of the first. Also with already strong financial market regulators compared to other countries, Australia isn't going to feel the brunt that other economies will. I think Australia is in a good position and as long as the Liberal party doesn't resort to anymore populist politics, confidence should be fine.

good explanation, what does it mean for everyday people

What does it mean for Joe the plumber and Joe six-pack??

 

[lolcal]

sure it increases confidence like that, but think of it like this - all those people who withdrew their cash from funds like AXA and other non guaranteed funds, that causes big problems. and in a way, by the government guaranteeing those deposits, it creates uncertainty imo. although the money there is safe, people worry about money elsewhere, they rushed to change where their deposits were and caused transaction freezes.

sure it's a good thing in a way, but when you think about it it's kind of harmful.

 

[Q2C-ME]

i dont think you should get that specific....stay macroish....just cover how it affects an economy, because you wont be able to cover everything...like for e.g. international convergence may affect a consumer in one way , an employer in another. and an investor in another...but their all the same person
and even then ...it may affect a certain type of consumer in one way.... a certain type of employer e.t.c....just keep it short an macro and you wont digress.

although i kno what your getting at it...and its good it gives that heightened level of i understand how this affects the individual, but i dunno that makes me digress :S

 

[Q2C-ME]

any1 else?