The Murray-Darling problem

The Murray-Darling rivers are an absolute mess.

Two recent articles sheds light on the problem

• Q J Wang and Avril Horne
• John Quiggin

Well worth reading

The Phillips Curve revisited

We have had three articles on the Phillips curve.
This is especially important as most central banks live by the theory however it appears to be dying?

• David Andolfatto
• John Cochrane
• David Glasner and
• AGAIN
• and AGAIN

I have to admit it is very interesting to speculate on why wages do not rise much in a recovery these days anywhere

Kevin Bonham again on our polling woes

More from the imitable Kevin Bonham on the polling disaster that was the last election.

He is thin king maybe it was Morrison that was the reason. Read it and fiind out

Around the Traps 5/7/18

It is time for Around the Traps again.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Peter Martin on buckle-up-2019-20-survey-finds-the-economy-weak-and-heading-down-and-thats-ahead-of-surprises, ultra-low-unemployment-is-in-our-grasp-how-philip-lowe-became-the-governor-who-lifted-our-ambition
• Ann Twomey on if-dutton-had-defeated-turnbull-could-the-governor-general-have-stopped-him-becoming-prime-minister
• Ricardo Ambivalence on mines-shy-voters-and-the-2019-federal-election-puzzle, rba-double-cut-no-pike, qld-coal-country, thesis-snaps
• Mark the Ballot on three-anchored-models
• Kevin Bonham on what-might-voting-intention-have-really-look-like-in-the-last-federal-term
• Danielle Wood et al on stages-1-and-2-of-the-tax-cuts-should-pass-but-stage-3-would-return-us-to-the-1950s
• Ian Wright on regardless-of-what-the-federal-court-says-you-shouldnt-put-flushable-wipes-down-the-loo
• Croaking Cassandra on 40-years-on, apocalypse-cow, , the-governments-industry-strategy,emissions-and-immigration-policy, reserve-bank-still-spinning, a-new-bis-paper-that-undermines-the-reserve-banks-case
• Anna Huggins on we-need-human-oversight-of-machine-decisions-to-stop-robo-debt-drama
• The Kouk on the-rba-cuts-interest-rates-again-how-low-will-they-go
• Jason Pallard on getting-out-of-liquor-and-pokies-will-cost-woolworths-but-deliver-lasting-benefits
• Dennis Muller on parliamentary-press-freedom-inquiry-letting-the-fox-guard-the-henhouse
• Bill John Swannie on in-australia-criticising-a-judge-can-land-you-in-jail-this-is-a-danger-for-democracy
• renew economy on huge-solar-and-battery-project-wins-development-approval-in-south-australia, delayed-greenhouse-data-confirms-rising-emissions-contemptuous-government

Northern America

• Jeffrey Sachs on trump-reliance-on-economic-sanctions Thanks Mark
• Andre M Perry on black-workers-are-being-left-behind-by-full-employment Thanks Mark
• Tyler Atkinson on consumers and economists views on inflation can complicate policy making  Thanks Mark 
• FRBSF on is-slow-still-new-normal-for-gdp-growth Thanks Mark
• Robert Waldmann on us-trade-deficits-and-blue-collar-jobs
• Daniel Drezner on trump-foreign-policy-is-all-hat-no-cattle Thanks Brad
• the conversable economist on food-stamps-evolution-and-rising-take-up-rates, is-health-care-policy-focus-shifting-from-access-to-cost, james-truslow-adams-and-origins-of-the-american-dream, loyalty-to-nation-all-time-loyalty-to-the=government-when-it-deserves-itm us-multinationals-expand-their-foreign-based-R&D
• Robert E Kelly on republican-s-post-iraq-dilemma-hollow-threats
• Menzie Chinn on plain-vanilla-term-spread-model-recession-probability-for-2020, guest-contribution-economic-policy-uncertainty-and-recession-probability-july-2019-update
• Pro growth Liberal on housing-elizabeth-warren-v-john-cochrane
• Narayana Kocherlakota on the-fed-s-risky-plan-to-boost-unemployment Thanks Brad
• Equitable Growth on top-12-of-2018 Thanks Brad
• Richard Holden on vital-signs-trumps-nominations-for-the-us-federal-reserve-are-an-odd-lot-and-an-even-bet
• David Appell on us-coal-production-since-2002

Europe

• Mainly Macro on the-uk-right-wing-press-news, is-brexit-culture-war-or-class-war
• stumbling and mumbling on the-tories-imaginary-world, how-not-to-be-an-arrogant-prat
• Rachel Donadio on greece-election-end-era-europe

Asia

• Stephen Joske on lessons-baoshang-bank-collapse
• Alex Ward on iran-uranium-nuclear-deal-trump-war
• Menzie Chinn on chinese-gdp-growth-now-and-near-future
• Barkley Rosser on iran-nuclear-deal-better-late-than-never
• Denghua Zhang and Jianwin Ying on china-s-belt-and-road-initiative-inside-looking-out
• Benjamin Habib on trump-and-kim-are-talking-again-but-the-leaders-have-yet-to-find-real-common-ground
• Michael Sainsbury on vietnam-shapes-key-winner-us-china-trade-war
• Mahmoud Pargoo on iran-s-dangerous-gamble
• Savinda Po and Lucy West on cambodia-regime-s-base-survival-instinct-display
• Bates Gill on first-salvo-missile-tests-mark-intensified-us-china-competition

Wonk

• John Quiggin on opportunity-cost-mmt-and-public-spending
• Cecchetti and Schoenholtz on the-case-for-strengthening-automatic-fiscal-stabilizers Thanks Mark 
• Tim Harford on the-dying-art-of-compromise, the-dying-art-of-compromise
• Martina Lawless on economic-and-social-review-summer-2019
• the conversable economist on an-overview-of-social-science-research
• the grumpy economist on the-phillips-curve-is-still-dead
• Kruggers on don't-blame-robots-for-low-wages Thanks Brad 
• Cassandras Legacy on did-climate-change-didnt-cause-fall-of-the=roman-empire-no
• Vani Murali on essons-globalisation-vulnerable-women-nokia-factory
• stumbling and mumbling on class-and-optimism
• Stephen Grenville on limits-global-monetary-policy
• Donald Rothwell on japan-again-hunting-whales-what-can-be-done
• Uneasy Money on phillips-curve-musings
• Marcus Colla on burden-friendship-germany-trump-and-nato
• Gary forsythe on a critical history of early rome  Thanks Brad

General

• Sara Twogood on ack-i-need-chocolate-the-science-of-pms-food-cravings
• Christopher P Holstege on why-lead-is-dangerous-and-the-damage-it-does
• Alex Tabarrok on what-is-the-probability-of-a-nuclear-war
• James Younger on curious-kids-how-can-penguins-stay-warm-in-the-freezing-cold-waters-of-antarctica
• Miriam Frankel et al on to-the-moon-and-beyond-1-what-we-learned-from-landing-on-the-moon-and-why-we-stopped-going
• Andrew Carey on research-check-can-drinking-coffee-help-you-lose-weight

Climate

• Arctic Sea Ice on june-2019-one-hell-of-a-month
• Damian Carrington on precipitous-fall-in-antarctic-sea-ice-revealed
• Nerile Abram on time-will-tell-if-this-is-a-record-summer-for-greenland-ice-melt-but-the-pattern-over-the-past-20-years-is-clear
• Moyhu on fake-charge-of-tampering-in-giss, june-ncepncar-global-surface-anomaly-down-from-may
• and Then Theres Physics on the-black-knight
• renew economy on climate-friend-or-carbon-bomb-global-gas-market-faces-1-3trn-stranded-asset-risk

Andrew Gelman (mainly stats)

• all-i-need-is-time-a-moment-that-is-mine-while-im-in-between
• what-if-the-authors-of-that-regression-discontinuity-paper-had-only-reported-their-local-linear-model-results-with-no-graph
• this-is-a-great-example-for-a-statistics-class-or-a-class-on-survey-sampling-or-a-political-science-class
• how-to-read-in-quantitative-social-science-and-by-implication-how-to-write
• causal inference with some time-varying mediators
• reproducibility-problems-in-the-natural-sciences
• read-this-its-about-importance-sampling
• Xian on obayes-19-2,obayes-19-3, obayes-19-4
• Kaiser Fung on inside-the-black-box-big-tech-surveillance

Genial Dave Giles (econometrics)

• july-reading
• freakometrics on optimal transport on large networks

Dianne Coyle ( quirky + book reviews)

• industrial-policy-back
• thinking-strategically-about-platforms
• Tyler Cowen on what-ive-been-reading
• Sam Roggeveen on book-review-hugh-white-s-how-defend-australia

Vox wonk

• inflation-and-exchange-rate-targeting-challenges-under-fiscal-dominance
• eastern-europe-s-adjustment-tale
• technology-adoption-and-middle-income-trap
• mobility-and-congestion-urban-india
• police-monitored-cameras-and-crime
• misdirection-and-trade-war-malediction-2018
• labour-market-shocks-and-demand-trade-protection
• robots-and-firms
• cross-price-effects-and-extensive-margin-cross-border-shopping
• productivity-growth-intangible-economy
• economic-geography-sovereignist-europe
• digital-currency-areas
• decline-us-business-dynamism
• trade-uncertainty-rising-and-can-harm-global-economy
• women-shaping-global-economic-governance-new-ebook
• standard-errors-persistence
• global-capital-flows-cycle-and-its-drivers
• gender-promotion-gap-evidence-ecb

Three great shows end on the ABC

My television viewing will not be the same.
The ABC had/ three wonderful so hows on over the weekend that end/ending up.

First is ENDEAVOUR.
I think could very well be the best TV series i have ever watched. It is a british crime series and all the characters are terrific. and they change and thus are developed well.
both Shaun Evans as Morse and the writers have benefited from Inspector Morse.That was an average series  and john Thaw was an equally average actor. Whereas the entire cast is first class and each episode is simply wonderfully entertaining. I do hope there is another season coming. The final episode was so good I have watched it twice.

Second is SHETLAND
No need to guess where it is set and it is always set in summer so wearing of warm clothes is essential!  The scenery is fantastic and those glorious scottish accents but it is up there as a police drama. I am looking forward to the next season.

Lastly there is our very own HARROW
I thought the first season was average  and I only watch because I am a huge Ion Gruffud fan however the second season was amazing. The writing, acting etc all stepped up a notch. The last episode occurs on sunday and I am looking forward to it.

Just what am I going to watch now

Another interest rate cut.

The RBA is definitely worried.They cut rates well before the next CPI release.
As usual others have got in before me
Firstly Ricardo Ambivalence has his say and his article has links to Lowe's speech.

and also The Kouk has his.

I am now of the mind the RBA should not cut below 1% for any amount of reasons:

• effect on retail rates
• little in the locker if things deteriorate
• Cutting raters below 1% won't have a great effect anyway
• Having two apartment towers with building problems must have an effect on the housing market

The way to go is fiscal policy infrastructure spending in particular.

Infrastructure Australia. has a list of priorities which both the Government and Opposition ignore when trotting out what they with to spend on. The priorities show which projects have the biggest bang for the buck and so will grease the wheels of the economy better.

Do it and do it now

Split the tax bill

The Government will put its tax bill which involves three tranches, today in Parliament.

 The Grattan Institute has a great article on why the bill should be split. I totally agree with it.
My mate Ricardo Ambivalence on the other supports the bills for different reasons mind you.

Now he has sound points on his side however I feel , as Grattan point out, there are valid criticisms to be made of Treasury's projections that allows the tax cuts and also gets a small surplus. As I have said previously I suspect these projections will have to be revised and if so the tax cuts then become a noose around Morrison's neck.
I have a simple method to determine whether tax cuts lead to structural deterioration. If not accompanied by spending cuts then of course they will. These tax cuts have no accompanied spending cuts. They always rely on rising tax income just like Howard and Costello did before the GFC.

We shall see what occurs.