Should homeowners and investors fix their mortgage rate, given that the RBA is now set to raise the cash rate substantially over coming months? The answer to that urgent question depends on another question – is inflation transitory, or will it persist? If the economic factors that are driving the demand for goods and services […]
The RBA (Reserve Bank of Australia) has been widely criticized for its conduct of monetary policy over the last two years. Some of that criticism is misplaced. Yes, the Bank’s inflation forecasts were far too low, but the bond market’s forecasts were not much different. Nor should the RBA be heavily criticized for being slow to respond […]
The RBA (Reserve Bank of Australia) Board doesn’t meet in January. That is a pity, because otherwise the Board might announce a New Year resolution. One particular resolution would be very reassuring to hear: A resolution to not raise interest rates until inflation expectations are re-anchored well above their pre-Covid levels. That is, not to […]
Investment by super funds in high quality private assets, such as infrastructure and private equity, creates large benefits for their members, along with some problems. Unfortunately, recent commentary by Richard Holden (Opinion Nov 10 & 23) and others has overstated those problems and largely ignored the very substantial benefits of super fund investment in private assets. […]
When a corporation buys back its own shares, then what happens to the share price? A classic finance fallacy is as follows. The share price will rise because the buyback reduces the number of shares among which the firm’s profits will be divided (true), which increases earnings per share (also true), which in turn will […]
Should Australia cut its corporate tax rate to 15% and eliminate dividend imputation? That question arises again now that the G7 countries have agreed, in principle, to a global minimum corporate tax rate of 15%. There would be winners and losers in such a change and the losers have a lot more political influence than […]
Which asset classes are generally most resilient to rising inflation? Is it shares? property? bonds? infrastructure? If we put aside (for now) the possible unwinding of QE, then I have infrastructure and negatively geared property at the top of my list. There are many considerations in regard to inflation resilience, but here I emphasise two in particular. First, the […]
Expectations for the global economy have turned very sour in the last nine months and especially these past two months. Growth forecasts are down and expected inflation is way down. The same is true for the Australian economy. Does that mean investors should wind back their allocation to global shares, Australian shares and other risky […]
Should we cut Australia’s corporate tax rate to 15% and eliminate dividend imputation? That question arises again now that the G7 countries have agreed, in principal, to a global minimum corporate tax rate of 15%. There would be winners and losers in such a change and the losers have a lot more political influence than the winners, […]
‘Institutions’ is a word that is used so freely that many people don’t even realise they don’t know its true meaning. That is unfortunate because an understanding of the nature and purpose of institutions, and how they evolve through time, is essential to not only economics, but history, politics, and much else. This article is the second […]
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