#85: How To Put The Economy Into A Coma — Chris Edmond & Steve Hamilton

April 1, 2020

Chris Edmond and Steve Hamilton are Australian economists.

Show notes

Selected links

  • Follow Chris Edmond: Website | Twitter
  • Follow Steve Hamilton: Website | Twitter
  • ‘A Rush Back to ‘Normal’ Would Be the Blunder of the Century’, WIRED’s interview of Larry Summers
  • ‘Impact of non-pharmaceutical interventions to reduce COVID-19 mortality and healthcare demand’, Imperial College London paper by Neil Ferguson et al
  • ‘How the recession we have to have can be sharp but short’, The Australian Financial Review article by Steve Hamilton and Stan Veuger
  • ‘Coronavirus: payroll subsidy will save the economy’, The Australian article by Chris Edmond and Bruce Preston

Topics discussed

  • What happens to an economy when non-essential workers are told to stay home? 9:22
  • The false choice between health and economic outcomes. 20:53
  • How long do lockdowns need to last? 36:39
  • Are Australia’s lockdowns hard enough? 43:46
  • What does pandemic-appropriate fiscal stimulus look like? 46:29
  • Is this the end of surplus fetishism? 59:45
  • JobKeeper. 1:06:44
  • Will Australia see further rounds of stimulus? 1:19:21
  • Is the financial economy healthy? 1:22:33
  • Which one piece of advice would Steve and Chris give to the Australian Government? 1:26:26

One Comment

Miguel
reply
May 13, 2020 2:57 am

Hi Joe!
Great episode as always.
Is the financial economy healthy? 1:22:33
The question above made me think about a conversation I had with someone who works for CBA that told me that a lot of people are moving their money from other Banks to CBA with the reason being that most people see CBA more ‘safe’ relatively than the other big 4 banks. Perhaps this can be seen as a perception of most people have an expectation that CBA is too big to fail. I do not have a data on this but would be very interesting to see if this is true. This effect of people putting their savings into CBA has let CBA fulfil its capital reserve obligations without raising more money in contrast to the other big banks. This, among other things, has been priced in the share price of CBA falling less than the other four.

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