Dr Martin Watts on:

Macroeconomic policy in the pandemic era and beyond

A Zoom webinar: Saturday 11 July 2020 – 2.00pm (AEST)

The Covid-19 Pandemic has caused major macroeconomic dislocation across the world. This has happened due to both the collapse of aggregate spending and the reduced capacity to produce goods and services due to the breakdown of international supply chains and social distancing requirements.

Many governments have responded by providing income support to segments of the population as well as assistance to businesses in sectors of the economy which have been particularly affected. In Australia these include aviation, agriculture, fisheries, tourism and the arts.

The gaps in the financial support given to individuals and households have highlighted the deep fissures which already existed in the Australian economy and have caused chronic and growing social and economic inequality. We see this in an increasingly fragmented labour market and unequal access to childcare, education and adequate healthcare. These societal ills can be attributed to the neoliberal policy agenda which has been imposed over the past 40 years.

Despite these inequalities the federal government is already signalling it intends to abandon struggling Australians; it plans to withdraw financial support for individuals in September and has indicated a tacit agreement to real wage cuts.

The response of Australian heterodox economists including Pennington (2020) and Van Barnweld et al (2020) has been a wish list of policy initiatives. While reflecting the economic and social realities, these have not been integrated into a coherent macroeconomic framework. While they acknowledge the need for full employment it is likely that given the pump priming character of the proposed initiatives, expectations of rising inflation will stymy the achievement of full employment which we define here as 2% unemployment and no underemployment.

In this presentation Dr Watts will:

1) Highlight the deteriorating state of the labour market;

2) Briefly summarise the recent initiatives that have been taken by the Federal Government;

3) Outline proposed additional policy initiatives; and

4) Develop a coherent full employment policy framework which will begin to address the deep-seated social and economic inequality which has been exacerbated by the crisis.

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