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Quantifying “Dog Days”
Author(s) -
Dixon Janine M.,
Dixon Peter B.,
Giesecke James A.,
Rimmer Maureen T.
Publication year - 2014
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12080
Subject(s) - boom , economics , consolidation (business) , productivity , wage , baby boom , investment (military) , population , labour economics , macroeconomics , finance , engineering , political science , environmental engineering , sociology , demography , politics , law
In Dog Days , Garnaut (2013) portrays A ustralia'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 G arnaut, we find that wage and demand restraint will be required to steer A ustralia 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.