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."

Thursday, December 16, 2010

Puzzle of the day: why is employment gapping economic growth???

Well, it depends on how you measure it. In the first chart, Macquarie compare employment with inflation-adjusted (or real) GDP. There is a bg disconnect between the two. But when you then compare employment and nominal (or actual) GDP, the gap vanishes. That shows the impact of our commodity price boom. It also touches on the points I have raised recently about the trouble one has measuring real GDP during a terms of trade boom, which the RBA first noted back in 2006.