Well the Janet Yellen and the US Federal Reserve were once again dominating headlines this week amidst renewed talks of increasing the US version of the cash rate, the Federal Funds Rate. It’s been within a target range of 0.00-0.25% for going on 7 years but in March there were comments that it could start to rise.
When Yellen speaks markets listen and she indicated this could happen as early as September the US dollar saw it’s biggest rise in nearly 2 years (a 1.7% increase) which could continue into next week.
Read more here.
We’ve had some great contributions these past few weeks and next week we’re expecting one from our VP-Events Ruark Lantay. But this week I’ll take the opportunity to monopolize the newsletter and include an article on the ‘mathiness’ of economics.
Earlier this month Paul Romer (of the Romer Model and charter cities fame) published a paper in which he talks about the (improper/over)use of maths in theories of economic growth. The author of this article then builds on that and questions the paradigm of using theoretical rather than empirical models in macroeconomics. It’s an interesting perspective and a major issue in contemporary economics so have a look if you’re interested.
Once again the Budget has been the headline grabber this week. Packed full of a number of different initiatives probably the best place to find an overview is to just scroll down on the Budget homepage which provides a succinct review of just what’s planned to be carried out this coming fiscal year and is said to start us down the road to surplus in a sustainable fashion.
However, probably the most interesting thing about it has been how surprisingly uninteresting it seems coming from last years Budget. Many have pointed out how similar to an election budget it seems which may suggest there’s one coming up before next May. But then again I’m not a commentator.
This article comes from EcoSoc’s hardworking VP-Internal Lingda Wei and the subject matter is quite abstract for economics…
Extremely poor puns aside, it raises some interesting questions about the relationship between the art world and economic world. Freeports, fraud and a police sting operation are just the start of this article which really forces you to think about all the possible economic impacts the creative industry has on the the people’s assets, national income and the world at large.
Even with the RBA’s decision to reduce the cash rate to a new historic low of 2% the Budget is what has dominated domestic economics this week. It’s been hard to keep up with all the last minute announcements, which oddly enough seem to have been spearheaded by Christopher Pyne’s new bestie the Social Services Minister Scott Morrison rather than Joe Hockey. I won’t try and give a succinct summary of what’s going on but instead direct you to a couple of links: one for all your minute by minute Budget coverage and another detailing for what’s known so far. Also, for all you budget devotees and structural reform enthusiasts out there I hope your budget night parties go well.