Help if you're good (1 Viewer)

[alex1992]

Just a question,

The simultaneous nature that has indeed encapsulated the global downturn in 2009 has caused severe indifferences, yet simultaneously, simularities in the policy responses initiated by world nations. However, the process of the domestic market operations as a core component of the Australian economy has indeed been a driving force in maintaining positive economic growth.

Thus, my question is:

Why has the reserve bank sought to exemplify the income inequality experienced throughout Australia through its recent monetary policy stances particularly that of purschasing overnight bonds through the process of domestic market operation, and why has the government seemingly abolished the once intrinsic labour market policies that have sought to minimise u/e in times of economic ambiguity, and instead adopted a simulcrum of a framework that has centralised wage determination in the modern age, thus emphasinsing the weakness in acceptable financial management on behalf of the Rudd Government in their total disregard for the premise established by the Howard government?

Please, only attempt to answer this question is you have a stronghold on the fundamental economic theory that encapsulates my didactic arguement.

Regards.

 

[Justin123456789]

Just a question,

The simultaneous nature that has indeed encapsulated the global downturn in 2009 has caused severe indifferences, yet simultaneously, simularities in the policy responses initiated by world nations. However, the process of the domestic market operations as a core component of the Australian economy has indeed been a driving force in maintaining positive economic growth.

Thus, my question is:

Why has the reserve bank sought to exemplify the income inequality experienced throughout Australia through its recent monetary policy stances particularly that of purschasing overnight bonds through the process of domestic market operation, and why has the government seemingly abolished the once intrinsic labour market policies that have sought to minimise u/e in times of economic ambiguity, and instead adopted a simulcrum of a framework that has centralised wage determination in the modern age, thus emphasinsing the weakness in acceptable financial management on behalf of the Rudd Government in their total disregard for the premise established by the Howard government?

Please, only attempt to answer this question is you have a stronghold on the fundamental economic theory that encapsulates my didactic arguement.

Regards.

it seems like your trying to "sound" smart. no offence.

firstly, a loosening of monetary policy until the last meeting, does not exemplify income inequality. it actually makes it cheaper for low income earners mortgage rates and such.

also, the government has NOT abolished labour market policies. they are just CHANGING them. such as removing AWAS, creating 10 new employment standards and reintroducing no disadvantage test. < so i have no idea where you get this idea from.

secondly, they have not adopted a centralised system. it has been decentralised since the 1990s < so again, no idea where you get this idea from.

Rudd is actually improving labour market policies.

 

[gnrlies]

Just a question,

The simultaneous nature that has indeed encapsulated the global downturn in 2009 has caused severe indifferences, yet simultaneously, simularities in the policy responses initiated by world nations. However, the process of the domestic market operations as a core component of the Australian economy has indeed been a driving force in maintaining positive economic growth.

Thus, my question is:

Why has the reserve bank sought to exemplify the income inequality experienced throughout Australia through its recent monetary policy stances particularly that of purschasing overnight bonds through the process of domestic market operation, and why has the government seemingly abolished the once intrinsic labour market policies that have sought to minimise u/e in times of economic ambiguity, and instead adopted a simulcrum of a framework that has centralised wage determination in the modern age, thus emphasinsing the weakness in acceptable financial management on behalf of the Rudd Government in their total disregard for the premise established by the Howard government?

Please, only attempt to answer this question is you have a stronghold on the fundamental economic theory that encapsulates my didactic arguement.

Regards.

Hi I am not sure if this is a genuine question or just a beat up, but it seems you already have an opinion on this, so if you would like to share it then perhaps it can be a point of discussion rather than a loaded question.

 

[alex1992]

Justin123.. no offence taken,

firstly, a increase in the cash rate by the reserve bank, does indeed, increase exponential the negative effects on the poorer people in society - i.e. in attempting to restrain a non-existant inflation, the RBA has reduced the purcsahing power of low income earners, and thus increased income inequality.

secondly, i meant that SOME labour market policies have been abolished, which is typical of a change of government between two vastly distinct management philosophies.

further, you have not realised that recently policy action has, in a sense, caused a backwards movement in policy development - that is the Rudd Government's saftey net etc is reminice of a centralised system. I am saying that recent Rudd Govt. policies are causing a SLIGHT shift backwards towards a more centralised system.

 

[gnrlies]

Justin123.. no offence taken,

firstly, a increase in the cash rate by the reserve bank, does indeed, increase exponential the negative effects on the poorer people in society - i.e. in attempting to restrain a non-existant inflation, the RBA has reduced the purcsahing power of low income earners, and thus increased income inequality.

secondly, i meant that SOME labour market policies have been abolished, which is typical of a change of government between two vastly distinct management philosophies.

further, you have not realised that recently policy action has, in a sense, caused a backwards movement in policy development - that is the Rudd Government's saftey net etc is reminice of a centralised system. I am saying that recent Rudd Govt. policies are causing a SLIGHT shift backwards towards a more centralised system.

I think your analysis is very superficial.

Firstly the RBA has not increased interest rates during this period. They have significantly lowered them including a number of 50, 75 and 100 basis point cuts. The RBA has lowered rates throughout this period faster than it ever has (at least since the early 90's). This has ambiguous effects on the distribution of income as a number of stakeholders are affected differently. For example asset rich people are negatively affected by this, highly geared asset rich people benefit, and asset poor people are mostly unaffected. This being said it does lower unemployment which definately improves the distribution of income, but it is unlikely that those on lower incomes benefit more from this than those on higher incomes (considering the number of retrenchments in the financial sector).

The government's industrial relations reforms were probably not well timed, but they are just fulfilling an election promise.

 

[pete000]

I seem to disagree with points which are brought up. I believe that alex1992 brings up quite a solid point about the effect of monetary policy in that it discourages the economic objective of income equality and higher living standards for a higher proportion of people.

Justin and Gnrlies have misinterpreted the sophisticated use of terms, being unable to comprehend the economics terminology. The original poster says that the Rudd Government is NOW raising interest rates once again. Yes, they have come down since last year BUT not enough. The point which is missed is why the Rudd Government is raising them once again. The GFC seems to be still evident in the global economy, meaning that Australians still suffer from low consumer confidence. Although consumer confidence has slightly improved recently, the current stance of a tightening monetary policy will see consumer confidence fall and standards of living drop once again.

It is quite clear Justin and Gnarlies have both misunderstood or do not understand such complex reasoning.

 

[les coccinelles]

^the rba not the gov't tightens/loosens the cash rate. anyways, monetary policy is a pre-emptive inflationary instrument - full affects of rate rises won't be seen for 6-18months

 

[alex1992]

^the rba not the gov't tightens/loosens the cash rate. anyways, monetary policy is a pre-emptive inflationary instrument - full affects of rate rises won't be seen for 6-18months

Yes, we do indeed understand that the RBA is the govts monetary authority i.e. it acts on behalf of the govt.

and, yes, we are fully aware of the time lags on monetary policy, how i did state that the RBA has on many occasions signalled that this will be a slow recovery, i.e. inflation will not be a problem in the expected time period, to warrant an increase in the cash rate, which not only tightens credit costs, but severly damages consumer/business/investor confidence.

Gnriles, who are you, and what did you get in your economics hsc exam?

 

[tku336]

Being pretentious doesn't make your arguments smarter.

Raising interest rates from a 3.25 to 3.5 or even 3.75 is STILL expansionary, it's just at a lower expansionary rate. (you know, d^2x/dt^2 and all that).

Interest rates are lower than neutral - therefore they STILL speed up the economy and lower unemployment, just at a slower rate to manage inflationary pressures better.

 

[alex1992]

Being pretentious doesn't make your arguments smarter.

Raising interest rates from a 3.25 to 3.5 or even 3.75 is STILL expansionary, it's just at a lower expansionary rate. (you know, d^2x/dt^2 and all that).

Interest rates are lower than neutral - therefore they STILL speed up the economy and lower unemployment, just at a slower rate to manage inflationary pressures better.

Yes i do understand your point, i did never say that monetary policy was NOT expansionary, i am not quite sure what you are trying to say? Please read the question more closely if you are to comment.

And why are you are you mentioning the second derivate? Your arguemnt is indeed confusing.

 

[I Study Hard]

Wait, aren't the changes in labour market policy actually a better thing considering unemployment?
And hasn't the RBA only just increased the cash rate by 0.25(?) because it see's impending inflation what with the cash handouts that the government used to stimulate the economy.
OP has kind of confused me.
How does OP even know this stuff if he's doing his HSC in 2010 x_x;;;

 

[jkdsfsio3458963]

I seem to disagree with points which are brought up. I believe that alex1992 brings up quite a solid point about the effect of monetary policy in that it discourages the economic objective of income equality and higher living standards for a higher proportion of people.

Justin and Gnrlies have misinterpreted the sophisticated use of terms, being unable to comprehend the economics terminology. The original poster says that the Rudd Government is NOW raising interest rates once again. Yes, they have come down since last year BUT not enough. The point which is missed is why the Rudd Government is raising them once again. The GFC seems to be still evident in the global economy, meaning that Australians still suffer from low consumer confidence. Although consumer confidence has slightly improved recently, the current stance of a tightening monetary policy will see consumer confidence fall and standards of living drop once again.

It is quite clear Justin and Gnarlies have both misunderstood or do not understand such complex reasoning.

WTF? lowest interest rate in 50 years isn't low enough?

 

[jkdsfsio3458963]

Yes i do understand your point, i did never say that monetary policy was NOT expansionary, i am not quite sure what you are trying to say? Please read the question more closely if you are to comment.

And why are you are you mentioning the second derivate? Your arguemnt is indeed confusing.

your logic is indeed confusing, troll

 

[pete000]

WTF? lowest interest rate in 50 years isn't low enough?

Yes I understand the cash rate was at its lowest in a long period of time. However, I'm saying in these times of uncertaintly, the low cash rate is simply not enough in encouraging consumer spending at a level which is desirable.

 

[alex1992]

Yes, i am in yr11, however i am a yr12 economics student (accelerated).

Am i a troll for reply to questions on my own thread?

I am sorry if my logic is confusing - no doubt the cause of your elementary response, that adds no depth or insight into the topic.

 

[pete000]

I know alex1992, he is very modest he topped out 80+ canditure cohort. He should atleast be getting a top 5 state-placing and he is only in year 11. He is the real deal.

 

[jkdsfsio3458963]

he is indeed very modest

 

[gnrlies]

This thread is nothing more than an exercise in massaging the over inflated ego of the original poster. Using big words is great if you know how to use them and how to spell them. Otherwise stick to words you know how to use. Alex1992, if you want to keep contributing to this part of the forum I would suggest that you do it in a more constructive manner. Given that there are people on this board who are currently doing their HSC and you are only in year 11, I think it is a bit presumptuous of you to think that you know everything there is to know about economics and are in a position to lecture us all on the economy.

It is great if you have something to contribute, but perhaps you could choose a different way to do it rather than being a smartarse. You are more than welcome to disagree with something that I or anyone else has said, but explain why instead of insulting people whose knowledge of the HSC course is superior to your own (and I am not talking about myself, I am talking about the people on this board who have actually finished studying the HSC, rather that yourself who is just starting).

Given the potential for this thread to turn nasty, I am going to lock it.