The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Saturday, September 10, 2011

Cracking Stutchbury: Australia's NAIRU has risen because of labour rigidities

I was waiting to see someone in the media cotton on to this. I think UBS's Matty Johnson was the first to speculate on it. It is little surprise to see the caustic and staunch Stutchbury catch on:

"This gives the Reserve Bank little option but to hold up interest rates to deflate union expectations of 4 per cent or so nominal wages growth because weak productivity growth makes this inconsistent with its 2-3 per cent inflation target. That is, unemployment has to bubble above 5 per cent to offset the inflationary bargaining power that Gillard has given her union backers. Australia's natural unemployment rate has risen under the Fair Work regime that helped put her in the nation's top job."

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