Reforming federalism in Australia

Cheryl Saunders (Laureate Professor, Melbourne Law School at University of Melbourne) writes in The Conversation that the Australian Constitution sets up the framework for federal democracy surprisingly well, at the level of principle. But when governments pool their authority, horizontally or vertically, as in federations they sometimes need to do, the additional challenge of federal democracy is to find ways of ensuring that co-operation achieves its goals without eroding democratic principle and practice.

GST reform

John Freebairn (Professor of Economics, University of Melbourne), writing in The Conversation, considers what an equitable GST reform package should look like.

Lessons from Australia's experiment with carbon pricing

Hugh Saddler (Australian National University), writing in The Conversation, analyses detailed National Electricity Market (NEM) operational data from the Australian Energy Market Operator and finds that emissions and emissions intensity, which were increasing until shortly before June 2012, fell continuously for most of the two years to June 2014 (during which carbon pricing was in place).

How the Greek crisis unfolded

The economics team at NAB has put together a great slide pack explaining the evolution of the Greek debt crisis (link). My view is that the ultimate role of Governments is to improve the well-being of the people. However, the action of Euro-zone Governments in the Greek crisis has been the complete antithesis of this, highlighting the political immaturity of the Euro-zone experiment. And despite all of the pain inflicted on Greece, their position is worse and very unlikely to recover. Looking forward, Greece's only options would seem to be withdraw from the Euro-zone or wait for a miracle.

A Greek tragedy—The failure of European political economy under crisis

Four excellent articles in The Conversation on the absurd outcome emerging in the European debt crisis. The articles neatly tie together most of the different aspects of eurozone policy and the Greek debt crisis.

• How the hard-line approach taken by the IMF and Germany, against the pluck shown by Greece not to be bullied into oblivion (and, in so doing, courting economic collapse?), is explained by game theory is the subject of an article by Partha Gangopadhyay (University of Western Sydney).

• Barry Eichengreen (University of California, Berkeley) reviews his original prediction that an exit from the eurozone would never occur, and why that turned out to be incorrect—albeit, in an extreme situation characterised by political incompetence and perhaps even a disregard for economic sensibility. 

• André Broome (University of Warwick) explains why the IMF has become the enforcer of controversial structural reforms to a country experiencing severe economic distress, the social consequences of which have been disastrous over the last seven years.

• Wesley Widmaier (Griffith University) explains that the early European ideal was not about free trade or convertible currencies—it was about enhancing the collective welfare as a means to political union. However, the economic dog nevertheless came to wag the collective welfare tail, leading to a shift toward more free market, hard money views.The result would see European economic institutions evolve to such an extent that they place financial rectitude and monetary stability ahead of growth.

There is probably one thread missing in these explanations, and that is the role of fiscal policy—but the role of fiscal policy in the eurozone is a vexed issue in any case. I've added a few editorial notes on this issue, but the topic could do with a much more extensive explanation.