Australian Budget 2010-11, assorted

Budget Overview

What I wrote on Budget Day: Aid;

The story behind the $1 billion is that Australia has promised to increase development aid to 0.5 per cent of its Gross National Income (as I explain here (link to critique of Henry Review from last week), National Income and not the more commonly used Domestic Product is the right basis for most calculations. Unfortunately for the government (at least in this instance), a recent agreement by statistical agencies has changed the way GNI is calculated. Australia’s statisticians were the first to implement this change, and the result was to increase our GNI by 4 per cent, or about $50 billion.

Budget 2010 – It’s no Sex & The City 2

Federal budget 2010-11 – a sad document

Overall score: 4/10 – too much emphasis on the surplus and not enough emphasis on jobs and living standards.

Generating a Social Surplus;

Too often when evaluating the budget, we tend to focus on the accounts. To be sure, making sure the government has enough revenue to pay the bills is central to the process. But at its core, it is about economic policy-making. So on that level, we need to think broadly about economic benefits and costs.

IMF's Fiscal Monitor

See the transcript of the discussion of the FM;

QUESTIONER: Hi. One, I have a basic math question I’m trying to understand and then a sort of broader question.

So, you’re saying overall for the advanced G-20 countries, by 2030 the debt increases by 40 percentage points or thereabouts. And so to get it to a safe level they have to reduce the deficit by 8.5 percentage points over 10 years -- 8.75, sorry. How does that math work? Why does 8-3/4 get you 40 percentage points?

And then secondly, a sort of broader philosophical question, so you have a variety of tax increases and spending cuts, why don’t you have built in there, since you’re saying growth is so important, growth measures that you would score in the same way you’re scoring this?

MR. COTTARELLI: Let me start from the second one. Of course, there is a recovering growth in the projections, but there is no major increase in potential growth. The reason why we have not done this is to be, in a way, on the cautious side because these reforms in this area are extremely important but it’s difficult to calculate when they will yield benefits.

So, I think that while all countries facing fiscal adjustment should implement the measures to boost potential growth, I think it would be a bit risky to assume from the beginning that potential growth would pick up more strongly than expected, than before the crisis.

What countries, in our view, should do is to base fiscal adjustment on relatively conservative projections on output growth and then hope, to have the strong expectation, that through reforms it would be possible to improve potential growth and there would be upside surprises.

But in terms of measuring risk, I think it would be better not to base fiscal adjustment plans on the expectation that potential growth will be higher than before the crisis. Actually, it is better to be cautious.

On your specific question, the difference is between flows and stock. The improvement in the primary balance is an improvement in the flow and that of course is not from the first tier. It’s a gradual improvement, but it’s an improvement in the flow, in the primary position every year. As a result of this, at the end, you get a decline in the debt ratio by about -- with respect to the baseline and to the starting point, by about 35, 40 percentage points. We can perhaps go through separately to do the math later on at the end.

Assorted

Journal of Development Effectiveness

Human Opportunity Index for Latin America

2010 Nepal Economic Update

2010 Sri Lanka Economic Update

Australia's Future Tax System Review

Public Debt - the very basics

Why Our Current Budget Situation Is a Crisis;

In short, there is no precedent for reducing the ratio of debt to GDP by simply growing our way out of it. Instead, policy choices must be made in order to restore a primary surplus.

U.S Government Debt Since World War II;

My reading of this history is that one should not be optimistic that we can simply shrink the ratio of debt/GDP by growing the denominator. A lot of the reduction that took place between 1947 and 2000 was due to running primary surpluses. If we are going to do that again, we will have to do so in spite of the fact that military spending is a much smaller share of GDP (so that arithmetically there is less room to cut) and in spite of the way that Social Security and Medicare are going to be affected by demographics and health care spending trends.

Jobs at World Bank- Economist position at DEC

The Development Prospects Group (DECPG) is looking for an economist to join its modeling team with a focus on long-term economic developments on diverse topics such as agriculture, energy, climate change, poverty and the other Millennium Development Goals, and the interface between finance and development. The position is based in the Washington, DC headquarters of the World Bank.

Requirements include;

Advanced degree in economics (preferably a Ph.D.) with specialization in one or more of the following fields (agricultural, energy or environmental economics, CGE modeling, micro-simulation techniques, macro modeling)

Experience with CGE modeling, GAMS and/or Stata

Assorted- Bend it like Becker and others

Living on a Budget;

The grocery market in the United States accounts for more than 25 percent of all retail sales, totaling hundreds of billions of dollars. The last decade has seen important transformations in the market structure of this industry with non-traditional retailers such as Walmart and Costco accounting for more than 30 percent of total grocery sales. For any given product, the spread of consumer prices from different retailers is orders of magnitude larger than price fluctuations from changing world food market conditions. The average consumer faces prices that differ by more than 20 percent across stores in the same area.

The National Broadband Plan

Growth Policy- Paul Romer

The economist manifesto

Bend it like Becker

Angus Maddison, Economic Historian, Dies at 83

The Trouble With Rankings

Economics Uncut-A Complete Guide to Life, Death and Misadventure

Yuan to fight about it? The WTO legality of China’s exchange regime