The Australian Government has been having trouble getting its proposed Housing Australia Future Fund (HAFF) passed by the Senate. The policy looks odd. With some justification, the Australian Greens have commented: “In its current form the Housing Australia Future Fund (HAFF) legislation will see the housing crisis get worse. We can't fix the housing crisis by gambling money on the stock market and not guaranteeing a single cent will be spent on housing.” In their dissenting report on the bill, the Greens’ cited the views of this episode’s guest, Dr Cameron Murray. Cameron is a Post-Doctoral Researcher at the Henry Halloran Trust at the University of Sydney. 

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

Dr Cameron Murray is Post-Doctoral Researcher at Henry Halloran Trust, The University of Sydney. He is an economist specialising in property and urban development, environmental economics, rent-seeking and corruption.

Book: Rigged: How networks of powerful mates rip off everyday Australians

Website: https://fresheconomicthinking.substack.com/  

Twitter: @drcameronmurray 

What’s covered in this bonus episode

• Cameron’s submission to the Senate Inquiry into the Housing Australia Future Fund Bill [2:39]
• What’s going on with the Housing Australia Future Fund [5:02]
• The only reason you can make a premium is if you take risk [8:57]
• Why you need to separate the funding and the spending [10:36]
• Why doesn’t the Future Fund just directly invest in new houses? [14:21]
• How governments are increasingly doing financially tricky things that don’t make sense [19:23]
• Cameron’s thoughts on the impact of the bill on the level of investment in housing [23:14]
• What’s going on behind the scenes at Parliament House [26:18]

Cameron’s submission to the inquiry into the Housing Australia Future Fund:

https://fresheconomicthinking.substack.com/p/australias-housing-future-fund-my

Direct link to Senate Committee inquiry report:

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/HousingPackageofBills/Report

HAFF inquiry home page:

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/HousingPackageofBills

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

How can democracies reinvigorate themselves to triumph over authoritarianism? Does the West need to decouple from China? These and other questions are considered in Economics Explored episode 180. Foreign affairs expert Charles Dunst talks about his new book Defeating the Dictators with show host Gene Tunny. Among other things, Charles and Gene talk about the potential benefits of Public Private Partnerships (PPPs), such as Operation Warp Speed, the Trump administration’s COVID-19 vaccine plan. 

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

Charles Dunst is deputy director of research & analytics at The Asia Group, an adjunct fellow at the Center for Strategic and International Studies, and a contributing editor of American Purpose. He is the author of Defeating the Dictators: How Democracy Can Prevail in the Age of the Strongman (Hodder & Stoughton, February 2023). 

For further information about Charles, check out https://www.charlesdunst.com/. 

• What is the Asia Group and what does it do? [1:35]
• Is democracy no longer seen as the path to prosperity in developing economies? [5:28]
• What are the most important organizing principles for a democratic system? [11:38]
• Accountability and the lack of trust in government [16:34]
• Best practices for running a democratic country in the 21st century [21:36]
• Too much money in politics in the US [25:41]
• Does the West need to decouple from China? [27:37]
• The role of public private partnerships (PPPs) such as Operation Warp Speed [32:27]
• How will dictators be defeated if we govern ourselves better? [34:59]
• The importance of engaging in the conversation through social media and local governance [38:32]
• Inequality and the Dream Hoarders [39:00]

Defeating the Dictators (Please buy the book via this link to support the show):

https://amzn.to/3liQrjx

Matthew Engel’s FT article “The foreign states that own Britain’s railways”:

https://www.ft.com/content/e57c5fd0-bf54-11e9-9381-78bab8a70848

Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It

https://amzn.to/3LvCOrL

Track Nancy Pelosi’s stock portfolio:

https://www.capitoltrades.com/politicians/P000197

https://twitter.com/PelosiTracker_

Silicon Valley Bank (SVB) has collapsed and now Credit Suisse is in trouble. Should we be worried about Global Financial Crisis 2.0? Have the policy responses been sensible? Economics Explored host Gene Tunny provides his initial thoughts.

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

Links relevant to the episode:

Chris Joye's article on SVB:

https://www.livewiremarkets.com/wires/why-silicon-valley-bank-died-updated-2

NPR Indicator episode:

https://www.npr.org/2023/03/13/1163157993/silicon-valley-banks-three-fatal-flaws 

Sebastian Merkel's paper on narrow banking:

https://scholar.princeton.edu/sites/default/files/merkel/files/narrow_banking.pdf

World Bank paper on Bank Runs and Moral Hazard:

https://documents1.worldbank.org/curated/en/548031537377082747/pdf/WPS8589.pdf 

Bloomberg article on policy response:

https://www.bloomberg.com/news/articles/2023-03-12/us-moves-to-help-depositors-offer-bank-backstop-in-wake-of-svb?leadSource=uverify%20wall 

Breaking Points video SECRET Fed BAILOUT Pumps BILLIONS Into Banks

https://youtu.be/Lj5BE951aP8 

In his recent Spectator Australia article, Darren Brady Nelson argues for a radical, not a reserved review of Australia’s central bank, the Reserve Bank of Australia (RBA), which he describes as reckless. In Economics Explored episode 179, Darren provides an Austrian economics perspective on central banks, fiat money, and inflation. Show host Gene Tunny wraps up the episode with a discussion of the historical evidence on different monetary systems and inflation, evidence which confirms economies with fiat money are much more inflation prone. Gene then discusses whether a return to the gold standard would be desirable.

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• Darren’s thoughts on the current review of the Reserve Bank of Australia [1:46]
• How the RBA interprets the stability of the currency objective [6:54]
• What is the Austrian School? [10:19]
• Would the Austrians recommend abolishing the central bank? [21:08]
• The Bank of England’s report on modern banking [25:54]
• The need for a broader review of the Reserve Bank of Australia [30:35]
• Fiat money systems are much more prone to inflation than commodity money systems [34:20]

Darren’s bio on the Economics Explored website:

https://economicsexplored.com/regular-guests/

Darren’s opinion piece on the Spectator Australia website:

The RBA (reckless bank of Australia) needs a radical, not reserved, review

Bank of England paper on money creation:

Money creation in the modern economy | Bank of England  

Minneapolis Fed paper on fiat money, commodity money, and inflation:

Money, Inflation, and Output Under Fiat and Commodity Standards | Federal Reserve Bank of Minneapolis

US Gold Commission Report

Minority report of the Gold Commission, co-authored by Ron Paul:

The Case for Gold: Minority Report of the US Gold Commission 1982  

Alan Greenspan’s autobiography discusses his advice to President Reagan regarding gold:

The Age of Turbulence* 

Another great book on Greenspan which discusses Friedman’s views too:

The Man who Knew: The LIfe & Times of Alan Greenspan* 

*You can help support the show by buying a copy of either book via the links above. 

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

Dave Belvedere is a software engineer who searches for opportunities to make the crypto market more efficient and to make money at the same time - e.g. by exploiting arbitrage opportunities. Dave gives show host Gene Tunny and his colleague Tim Hughes an overview of cryptocurrency and also talks about NFTs and decentralized applications (dApps), such as Wizards & Dragons.

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• What is Dave’s role in the crypto market? [1:10]
• What is a chain and how does it work? [3:39]
• How long does it take to make a transaction? [9:26]
• What does a crypto exchange (e.g. FTX) do? [15:30]
• What do we know about miners? [20:20]
• What’s the future of crypto currencies? [25:44]
• What is Ethereum and how does it work? [45:57]
• What are the pros and cons of crypto? [52:07]
• What are dApps? [57:01]
• What are the use cases? What would motivate you to have crypto? [1:06:33]

Bitcoin creator:

https://en.wikipedia.org/wiki/Satoshi_Nakamoto

Wizards & Dragons game:

https://dappradar.com/ethereum/games/wizards-dragons-game

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

Can we get people to work harder and perform better if we make their pay performance-related - e.g. with performance bonuses or commissions? Does this work? Are individual or group incentives better? What does the evidence say? We know that people respond to incentives, but, as Gene Tunny and Tim Hughes discuss this episode, getting those incentives right can be tricky. 

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• What is performance-related pay? [0:41]
• The types of jobs in which performance-based pay works and doesn’t - e.g. fast food vs real estate [8:09]
• The importance of getting incentives right and having transparency [23:16]
• Performance-related pay is a difficult thing to put into practice [28:24]
• Group-based incentive schemes - evidence from a recent European study of the Hydrema manufacturing business [52:54]

IZA World of Labor - Performance-related pay and productivity

How group-based incentives increase worker performance | CEPR

Does Group-Based Incentive Pay Lead To Higher Productivity? Evidence from a Complex and Interdependent Industrial Production Process

The Use of Reward and Incentive Systems: A Case Study of McDonald's - ToughNickel

McDonald's Restaurants puts motivation and reward at heart of business strategy - Employee Benefits

Give and Take – Adam Grant

Performance-related pay | The Economist   

Real Estate Agent Commissions: How Does it Work and How Much Should You Be Paying

Learn the Truth About Real Estate Commissions | PropertyNow

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

What are the characteristics of superforecasters? How can a superforecasting team be developed? Hear from Warren Hatch, CEO of Good Judgment, a leading global forecasting business based in NYC. Accurate forecasts from Good Judgment superforecasters have included the scale of the pandemic. In early 2020, Good Judgment superforecasters estimated the United States would have over 200,000 deaths from COVID-19 with 99 percent certainty, an estimate that was considered by many as excessive at the time. Warren gives show host Gene Tunny and his colleague Tim Hughes some valuable tips on how to become a superforecaster. 

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• The Good Judgment forecasting business [2:41]
• What are the characteristics of superforecasters? [6:47]
• How to identify someone who is good at pattern recognition? Raven’s matrices [9:24]
• Link between subject matter expertise and forecasting ability [10:40]
• What are some of the techniques that are used to help super forecasters rid themselves of prejudice and bias? [12:57]
• How large does a super forecasting group need to be to be successful? [20:35]
• Tips for being a super forecaster [25:59]
• Using the percentages to retrospectively see how you’ve gone [27:56]
• Bayes’ Theorem [31:41]
• The importance of being open to a range of different views [42:47]

Warren Hatch is Good Judgment’s second CEO, succeeding co-founder Terry Murray. 

Before joining Good Judgment, Hatch was a partner at McAlinden Research, where he identified thematic investment opportunities in global markets for institutional investor clients. Previously, he co-managed a hedge fund seeded by Tiger Management and was a portfolio manager at Morgan Stanley.

Hatch holds a doctorate in politics from Oxford, a masters in Russian and international policy studies from Middlebury Institute of International Studies at Monterey, and a bachelors in history from the University of Utah. He is also a CFA® charterholder.

Good Judgment’s website and Twitter:

https://goodjudgment.com/ and https://twitter.com/superforecaster?lang=en

BBC Reel featuring Warren Hatch:

https://www.bbc.com/reel/video/p0dwntct/can-you-learn-to-predict-the-future-

Warren’s talk on YouTube which Gene quotes from in the episode:

What is Superforecasting? - Warren Hatch, Good Judgement

Article by Nicholas Gruen:

Making better economic forecasts

Links regarding foxes versus hedgehogs:

https://longnow.org/seminars/02007/jan/26/why-foxes-are-better-forecasters-than-hedgehogs/

https://goodjudgment.com/the-cost-of-overconfidence/

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

Australian Treasurer Jim Chalmers argues for values-based capitalism and against neoliberalism in a January 2023 essay in the Australian Monthly magazine. In this episode, show host Gene Tunny discusses the Treasurer’s essay with Dr John Humphreys. John is the Australian Taxpayers’ Alliance (ATA) Chief Economist and the founder of the Australian Liberal Democrats. Gene and John discuss just how literally we should take the Treasurer, the risks of the so-called co-investment approach, and whether the Treasurer is arguing for socialism (or a different -ism).      

This episode features audio from an ATA Econ Chat livestream broadcast on 31 January 23. You can watch the whole thing here:

https://www.facebook.com/AusTaxpayers/videos/509950911277607

You can follow the ATA on various platforms including Facebook and YouTube.

You can follow John Humphreys on Twitter.

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• Jim Chalmers’ idea of co-investing with the private sector [4:21]
• Regarding superannuation funds increasingly having social goals that they aim to meet as well as financial goals [9:12]
• The Australian stage 3 tax cuts and values-based capitalism: are they compatible?  [12:37]
• ESG, stakeholder capitalism, and socialism [15:24]
• How does the Treasurer intend to direct investment? [23:28]
• How a poor government policy can lead to another poor government policy [27:31]
• The social impact investment bank expected in the 2023 Australian budget [32:34]

Jim Chalmers’ essay Capitalism after the Crises

Clean Energy Finance Corporation Financial Outcomes 2021-22

Australian Government principles for social impact investing | Treasury.gov.au

Impact Investing Won’t Save Capitalism  

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Please consider signing up to receive our email updates and to access our e-book Top Ten Insights from Economics at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

The world’s population keeps growing and passed 8 billion in late 2022, but China’s population is now falling. There are concerns over what that means for its economy and the wider global economy. Is Paul Krugman right that a falling population means a weak Chinese economy? Show host Gene Tunny and his colleague Tim Hughes discuss the possible implications of a shrinking China, as well as global population projections out to 2100. The conversation touches on the environmental impact of a growing population and how well-placed we are to manage environmental challenges.    

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• The world’s population is on the rise and passed 8 billion in November 2022 [4:24]
• Why post-war population growth was so strong [7:43]
• What does a declining Chinese population mean for the Chinese and global economies? [14:09]
• The importance of immigration in Australia population growth [19:27]
• How the world’s population will eventually level out  toward the end of the century [23:35]
• Can governments solve environmental challenges? Discussion of the hole in the ozone layer and the Montreal Protocol [30:09]
• Paul Krugman vs Dean Baker on the future of China [42:07]
• Tim asks how do you maintain a growth mindset in a declining population? How do you make it work? [47:25] 
• Will demographics and a weaker economy bring down the Chinese administration? [53:06] 

UN World Population Prospects 2022 data

https://population.un.org/wpp/

Paul Krugman’s article “The problem(s) with China’s population drop”

https://themarketherald.com.au/the-problems-with-chinas-population-drop-2023-01-19/  

Dean Baker’s article “Paul Krugman, China’s Demographic Crisis, and the Which Way Is Up Problem in Economics”

https://cepr.net/paul-krugman-chinas-demographic-crisis-and-the-which-way-is-up-problem-in-economics/

China’s old-age dependency ratio

https://population.un.org/wpp/Graphs/Probabilistic/Ratios/OADR/65plus/15-64/156

Stanford Business School article “Baby Bust: Could Population Decline Spell the End of Economic Growth?” discussing Charles I Jones views on the link between population, innovation, and economic growth

https://www.gsb.stanford.edu/insights/baby-bust-could-population-decline-spell-end-economic-growth

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. Please consider signing up to receive our email updates and to access our e-book Top Ten Insights from Economics at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

Last year we saw the beginning of the normalization of interest rates and monetary policy, as central banks responded to accelerating inflation. Show host Gene Tunny talks about the current tightening cycle and when it might end with his colleague Arturo Espinoza. Among other things, Gene and Arturo discuss what history tells us about typical interest rates and returns on capital, referencing UK bank rate since 1694, interest rates on UK government consols, and returns on land written about by Jane Austen and Honoré de Balzac. They also consider whether we might see 17-18 percent interest rates again in Australia, rates which were last seen in 1989-90. 

Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. 

• What’s been happening with interest rates? [3:00]
• What is monetary policy normalization? [6:00]
• How many more interest rate increases will be needed? [11:11]
• Will we have a recession this year? [19:12]
• Is there a risk that we could get back to the crazily high interest rates seen in 1989-90 in Australia? [24:00]
• What is the equilibrium rate of interest? What is the real interest rate? [26:54]
• The main takeaway from this episode: monetary policy is still in a tightening cycle because inflation is too high [38:43]

Data released since the episode was recorded

Australian retail trade fell 3.9% in December, suggesting interest rate increases are starting to bite, meaning the RBA faces an even more difficult challenge in deciding how many more interest rate increases to make:

https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/dec-2022 

CBC article “U.S. inflation and consumer spending eased in December, new numbers show”:

https://www.cbc.ca/news/business/us-consumer-spending-holidays-1.6728173

Nine News story “Inflation in Australia rises to higher-than-expected 7.8 per cent”:

https://www.9news.com.au/finance/australia-inflation-consumer-price-index-december-quarter/9ef0ed13-e606-4c9e-b7db-feaccfae39fb

Inflation targets

US: 2%; see https://research.stlouisfed.org/publications/economic-synopses/2022/09/02/inflation-part-3-what-is-the-feds-current-goal-has-the-fed-met-its-inflation-mandate

Australia: 2-3%; see https://www.rba.gov.au/inflation/inflation-target.html

UK: 2%; see https://www.bankofengland.co.uk/monetary-policy

Bank of Finland article on monetary policy normalisation:

https://www.bofbulletin.fi/en/2022/3/what-is-monetary-policy-normalisation/

Chatham Financial article on US tightening cycles:

https://www.chathamfinancial.com/insights/historical-interest-rate-tightening-cycles

Jo Masters, Barrenjoey Chief Economist on how “Everything must go right for Australia to dodge a recession”

https://www.afr.com/markets/debt-markets/australia-will-dodge-close-call-recession-20221216-p5c71b

Chart on historical UK bank rate:

https://drive.google.com/file/d/1NDH7WjQBY0ZjWDWgY430qZdrrIf017_4/view?usp=share_link

Chart on central bank policy interest rates since 1960:

https://drive.google.com/file/d/1Mrzre-ijAKAvrU0j4YeQt71FkTr-gzob/view?usp=share_link

Chart on inflation in the US, UK and Australia:

https://drive.google.com/file/d/11lp880Wwb9bk_GI5wJ0EQ975h-ZkAuDK/view?usp=share_link

Wikipedia article on the Fisher equation:

https://en.wikipedia.org/wiki/Fisher_equation

Wikipedia article on UK consols:

https://en.wikipedia.org/wiki/Consol_(bond)

Guardian article on “UK bonds that financed first world war to be redeemed 100 years later”:

https://www.theguardian.com/business/2014/oct/31/uk-first-world-war-bonds-redeemed

What Jane Austen can tell us about historical rates of return:

https://janeaustensworld.com/2008/02/10/the-economics-of-pride-and-prejudice-or-why-a-single-man-with-a-fortune-of-4000-per-year-is-a-desirable-husband/

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. Economics Explored is available via  Apple Podcasts, Google Podcast, and other podcasting platforms.