Focus areas Flashcards
1
Q
Market failure
A
- What is a market?
- What is market failure?
- 6 types of market failure - externalities, missing, asymmetric, lack of competition, unstable prices, labour market failure
- How each can be resolved by Govt policy
- Govt failure definition
- 6 types of govt failure - subsidies protect; taxes distort; fixed prices distort; information failure; excessive bureaucracy & moral hazard
2
Q
Conflicting & compatible policy goals
A
- What is economic policy?
- Goals of economic policy?
- Policy goals - interpretation differs, conflicting, complimentary & priorities
- Economic analysis definition?
- Positive & normative statements/economics
- Evan’s policy statement
- Role of govt in economic policy - provision of market structure, intervention in resource allocation, redistribution of income & stabilisation of economy.
3
Q
FTAs
A
- Definition
- Benefits - jobs, incomes, living standards, local regional benefit, international investment & increased comp.
- Involved? - WTO, APEC & FTAs
- Good FTA includes? - more than WTO principles, transparent, comprehensive, simple rules of origin and allow for accession by third parties
- FTA’s - Singapore, Thailand, NZ, USA and now China. Working on Chile, Japan, Malaysia & Korea
4
Q
Competition and Industrial Policy
A
- NCP - 1995 - remove red tape, anti-comp rules & open up business opportunities
- Benefits - Productivity surge, lowered inflation, Australia to 8th in OECD
- Problems - Lower prices on telecom and rail not enough to replace assets or invest in network; Lower prices in energy don’t cover cost of supply
- Hawkins good industry policy - measures to promote industrial investment; - policies directed to industrial sectors - support for small and medium enterprises - reg reform & competition policy - regional development policy - environmental and energy policies - measures related to international investment & trade - industrial competition
- Govt role in industry policy - develop stock of human skills - provide market infrastructure - create an entrepreneurial climate - strengthen elements of local industry and encourage expert orientation
5
Q
Economic rationalism / financial deregulation
A
- Pusey statement
- Stone statement
- Definition
- Neo-liberalism
- Keynesian
- When occurred?
- Neville requirements for financial deregulation?
- Timeline - late 70s Coalition canvassed review - 79 Campbell Committee started - 81 Report (tender system for sale of treasury bonds already occurred) - 83 dollar floated
- Eco rationalists don’t consider market failure a problem
- Banks constrained - NBFIs
- Today - banks profitable, poor culture, growing super, asymmetric knowledge
- Government legislation - FOFA, Super & FSI
- Thoughts - more money, more regulation, more regulators, more eco capitalism
- Need mix market forces, social and state: promote structural economic adjustment, boost competitiveness, regulate macro economy & distribute costs / benefits fairly.
