Australia as a branch office economy

There has been a recent tendency for the location of executive leadership of companies engaged in natural resource-based production to shift from Australia to the Northern Hemisphere cities. What is the cause of this tendency?Does it matter to Australian welfare?If it matters, is there any action by Government that can weaken the tendency or reduce its negative effects? Direct regulatory intervention to prevent relocation of corporate headquarters is unlikely to increase Australian welfare. However, reforms to reduce transport and telecommunications costs and to increase the attractions of residence in Australia of people with skills that are important in executive leadership would have positive effectsAgricultural and Food Policy,

The market and the state in economic development: Some questions from East Asia and Australia

From the birth of modern economics with Adam Smith's Wealth of Nations two centuries ago, debate has continued in the West about the appropriate roles of markets and state intervention in co-ordinating economic activity. We have learned a great deal in principle from the concepts of public goods and external economies, and from the theory of public finance which relies so heavily on them. We have also learned that much depends upon the institutions and the ideas that shape the effectiveness both of markets and the state. The economist and the historian have been provided with a rich new set of data on the big theorems by the success of the economies of East Asia in recent decades. Japan, Taiwan, South Korea, Hong Kong, and Singapore have expanded economic output faster for longer than any other in world history. In this paper, I focus on a different type of implication - the implication of this new and powerful case of economic development for our understanding of economic processes. To the economist whose discipline is a social science, the emergence of this new case in a different cultural and institutional setting is as great a gift as a new hemisphere to an astronomer

Global development in the Twenty-first Century: the maturation of global development – responses to three critiques

Modern economic development does not travel for long in a straight line. Making sense of the periodic changes in direction is the never-ending challenge of economic analysis. My 2015 Holmes Lecture took up the challenge of explaining new twists and turns in the 21st century. Productivity and output growth are markedly lower in the developed countries, especially but not only since the great crash of 2008.  The populations of the developed countries are ageing rapidly and the labour forces declining or growing slowly. Global savings are high and investment low, giving rise to historically low real interest rates.&nbsp

Monetary Stability in Economic Development

This paper addresses four issues. The first is the identification of the regimes amongst which a choice can sensibly be made. The second is whether the use of an external currency would create a ‘currency area’ that would be more helpful to economic development than monetary independence. The third is whether, if monetary independence were likely to be optimal in theory, it would be superior in practice to integration into an external currency area, given the likely qualities of monetary policy at home and in the best alternative monetary area. The three issues are interrelated. This paper supplements recent work by Duncan (2005). It supports Duncan’s conclusion, that the South Pacific economies would provide themselves with a firmer monetary base for economic development if they were anchored firmly to an external currency. It provides some additional information and analysis that strengthens the case beyond that made by Duncan, arguing for a single or series of South Pacific currency boards linked to the Australian dollar or, better still, for all of the countries concerned, but more difficult to achieve, to a new currency formed through monetary union between Australia and New Zealand

A Pacific Free Trade Area?

This paper takes as the central objective of international economic diplomacy in the Pacific region, the preservation and enhancement of the conditions for continued economic growth in the style of recent decades. The international system that has supported vigorous trade expansion is under threat from several directions: tension between the United States and Japan (and to a lesser extent between the United States and Taiwan and Korea) over large trade and payments imbalances; the prospect of increased economic introversion in Europe as 1992 approaches; the accommodation of new patterns of comparative advantage in the Asian newly industrialised economies (NIEs) as they compress into a few years adjustments to a decade of rapid economic growth; and the new challenge of managing the emergence of China, with its partially reformed centrally planned system, as a major player in Pacific economic relations. It is important for peace and political stability, too, that the environment of relatively open economic relations that made a realistic alternative to autarky available to China at a crucial point in its political history, is preserved to provide similarly reliable alternatives for the states of Indochina, the Soviet Union and the Democratic People's Republic of Korea (DPRK), at a time of opportunity for progress on reducing longstanding sources of conflict

The Pacific: An Application of a General Theory of Economic Integration

The rapid expansion of intraregional trade within East Asia and in the wider Asia-Pacific region has been one of the defining characteristics of East Asian economic dynamism in recent decades. This paper seeks to explain the nature of intraregional economic integration in East Asia and the Pacific, and to draw implications for the future of the international trading system and for the place of East Asia and the Pacific in i

China - Linking Markets for Growth

China’s prosperity is at the core of the emerging Platinum Age of global economic growth. Rapid economic growth has been underpinned by expansion in its domestic markets, and the integration of domestic and international markets in goods, services, capital, labour and foreign exchange. Global commodity prices have reached historic highs, while China’s capital outflows have helped to hold down interest rates worldwide. Linking markets, both domestic and international, has been key to China’s success. In sustaining its strong economic growth, China has become one of the world’s most voracious consumers of energy. The challenge now facing the government and people of China is in achieving cooperation with the international community to avert the costs–both economic and environmental–of accelerating energy consumption. China–Linking Markets for Growth gathers together leading scholars on China’s economic success and its effect on the world economy into the next few decades