This Tuesday report will provide some insights into life in Kyoto for a westerner in the age of Covid. This will be my last report as I am returning to Australia at the end of this week. I will return to my work in Japan in 2023 but now have commitments back in Australia. Today, we visit some temples, gardens and textile centres.
First, the Bank of England seems to have abandoned credibility. Not to be outdone, the fiscal policy makers in government have now joined in the absurdity of mainstream policy thinking by reimposing austerity at the same time as the economy heads into recession. Milton Friedman and his gang used to claim the problem of fiscal policy was that it was practiced in a ‘pro-cyclical’ manner, by which they meant that because of time lags involved in implementation, by the time a stimulus to deal with a recession was in place and impacting, the private economy was already on the upturn – so that fiscal policy was working to push the cycle harder in the same direction. They claimed that was inherent to the use of fiscal policy, which rendered it unsuitable for use as a counter-stabilising (-cyclical) measure. The fact that that claim (which is contestable) won the debate in the 1970s is why all the central bank independence nonsense entered the scene and why New Keynesians claim that monetary policy should be the tool of choice to stabilise spending fluctuations. Now, the Tories in Britain are deliberately using fiscal policy in a pro-cyclical way – pushing the already recessionary forces further into the morass. A totally unnecessary and patently dangerous action. It almost beggars belief that they are getting away with this and the Labour Party essentially just offers to tune up the governments ‘violin strings’ a bit.
Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.
The Australian Bureau of Statistics (ABS) released of the latest labour force data today (November 17, 2022) – Labour Force, Australia – for October 2022. The labour market improveds somewhat in October 2022 with employment rising by 32,200 (0.2 per cent) on the back of strong full-time employment growth. With the sluggish labour force growth (as a result of below-average growth in the working age population) and an unchanged participation rate, the jobs growth saw unemployment and the official unemployment rate both decline. The full-time jobs growth also reduced underemployment. However, the underlying (‘What-if’) unemployment rate is closer to 6.1 per cent rather than the official rate of 3.4 per cent. There are still 1313.8 thousand Australian workers without work in one way or another (officially unemployed or underemployed). The only reason the unemployment rate is so low is because the underlying population growth remains low after the border closures over the last two years. But that is changing as immigration increases.
Today (September 16, 2022), the Australian Bureau of Statistics released the latest – Wage Price Index, Australia – for the September-quarter, which shows that the aggregate wage index rose by 1 per cent over the quarter and 3.1 per cent over the 12 months. There was a major discrepancy between the private sector (1.2 per cent for the quarter) and the public sector (just 0.6 per cent), which reflects the harsh wage caps that the federal and state governments have in place that are undermining the well-being of public employees. While there has been some pickup in the pace of nominal wages growth, the fact remains that workers have endured another quarter of real cuts to the purchasing power of their wage. This is the sixth consecutive quarter that real wages have fallen. There can be no sustained acceleration in the inflation rate arising from wages growth under these circumstances. Further with the gap between productivity growth and the declining real wages increasing, the massive redistribution of national income away from wages to profits continues. The business sector, as a whole, thinks it is clever to always oppose wages growth and the banks love that because they can foist more debt onto households to maintain their consumption expenditure. None of this offers workers a better future.
This Tuesday report will provide some insights into life in Kyoto for a westerner in the age of Covid. Temples, visitors, grammar and more temples interrupted by a astronomic event. A week in Kyoto.
There is a short memory in the public discussion about economics. If there wasn’t many players that get the wide platforms to express their views, opinions, forecasts, etc would burnout very quickly given how appalling their track records are. I was thinking about that while looking at the most recent Foreign Direct Investment data and reading UK Guardian articles about the demise of the most recent British Prime Minister. While it is very hard at present to trace the economic events in terms of individual drivers because Covid, the Ukraine situation and OPEC+ have certainly muddied the waters, there is some clear evidence available that demonstrates the mainstream anti-Brexit analysis and predictions was completely wrong. Given the same sort of characters and institutions are consistently given platforms in the media to proselytise and scare the b-jesus out of people about fiscal positions etc, one wonders why they retain credibility after being so wrong about Brexit, while commanding the floor of authority. My position is that they were wrong then and remain unreliable sources of information about what is happening now.
Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.