Quantifying "Dog Days"

In Dog Days, Garnaut (2013) portrays Australia's immediate future as characterised by the end of the mining investment boom, declining terms of trade, a decline in labour input per head of population, slow multifactor productivity growth, fiscal consolidation and rising world interest rates. We...

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Bibliographic Details
Published in:Economic papers (Economic Society of Australia) 2014-09, Vol.33 (3), p.203-219
Main Authors: Dixon, Janine M., Dixon, Peter B., Giesecke, James A., Rimmer, Maureen T.
Format: Article
Language:English
Subjects:
Australia
CGE modelling
Cost and standard of living
economic growth
Employment
Equilibrium models
Garnaut Dog Days
General economic equilibrium
Interest rates
Investment
Investments
living standards
macro forecasts
mining boom
Population
Productivity
Productivity growth
Standard of living
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Summary:In Dog Days, Garnaut (2013) portrays Australia's immediate future as characterised by the end of the mining investment boom, declining terms of trade, a decline in labour input per head of population, slow multifactor productivity growth, fiscal consolidation and rising world interest rates. We quantify the consequences of these developments using a detailed general equilibrium model. Consistent with Garnaut, we find that wage and demand restraint will be required to steer Australia through the difficult period ahead. Public understanding of Dog Days will help move expectations to match current unfavourable conditions and thereby promote an orderly adjustment with minimum damage to employment and standards of living.
ISSN:0812-0439
1759-3441
DOI:10.1111/1759-3441.12080