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Course notes quick navigation
1 Introductory concepts 2 Market mechanism 3 Elasticities 4 Market structures 5 Market failures 6 Macro economic activity/eco growth 7 Inflation 8 Employment & unemployment 9 External Stability 10 Income distribution 11.Factors affecting economy 12 Fiscal/Budgetary policy 13 Monetary Policy 14 Aggregate Supply Policies 15 The Policy Mix
Alternative measures of a nation’s welfare or living standards
The Genuine Progress Indicator (GPI)
The GPI is an indicator of national well being that seeks to overcome the difficulties associated with the use of GDP (or real GDP per capita) as a measure of overall living standards for a nation. Like GDP, the GPI starts with a focus on expenditure on goods and services to provide an idea about how our material living standards are likely to have changed over time. However, it then takes into account a host of other factors not taken into account by GDP estimates. These include things like the social costs associated with unemployment, crime, problem gambling, excessive work, natural resource depletion and pollution. To illustrate how GPI statistics are likely to be different to GDP statistics, we will use the example of problem gambling, which has debilitating impacts on families and society more generally. For simplicity, let’s assume that the Australians spent $800m in 2015 on goods that are inherently bad for us, such as cigarettes. This amount would be included as part of GDP, and living standards as measured by GDP per capita would be inflated. However, the bulk of this $800m would be subtracted in the GPI because it actually detracts from national welfare, despite it adding to the production effort.
Measures of Australia’s Progress (MAP)
In 2002, the ABS attempted to address some of the limitations associated with the use of its statistics as measures of ‘the nation’s progress’ or our ‘national well-being’. It introduced a new publication called ‘Measures of Australia’s Progress’ (Cat. No. 1370) with the specific purpose of finding an answer to the question: ‘Is life in Australia getting better?’ While the ABS makes it clear that it is too difficult to arrive at a definitive answer, the publication of a number of indicators helps to provide some picture of our progress over time.
Click on the ABS produced video ‘What is MAP’
The ABS has formulated four key ‘domains’ that are used to summarise the overall changes in our nation’s ‘wealth’ over time. These are:
Within each of these domains, there are a number of ‘dimensions’ that serve to provide an indication of the changes that might be taking place in the nation’s ‘progress’ over time. For example, within the ‘society’ domain, the dimensions include changes that may have taken place in our health, work situations or safety. Within the ‘economy’ domain, national income and productivity are important, within the ‘environment’ domain, dimensions such as changes in biodiversity and levels of waste are relevant. Within the ‘governance’ domain, the opportunity to participate in decision making and governance processes in Australia is relevant.
Within each dimension there is a range of statistical measures that provides an indication of how the dimensions have changed, and these are known as ‘progress indicators.’ For example, a progress indicator related to society’s health is the statistic ‘life expectancy,’ and a progress indicator for national income is ‘real national disposable income per capita.’ The latest results can be viewed here.
Happiness indicators
The most commonly used survey of ‘happiness’ around the globe is produced by the Sustainable Development Solutions Network. It examines changes in the happiness levels of 158 countries around the world. The first report was published in 2012, the second in 2013, and the third on April 23, 2015. It reveals that Australia is currently the 10th happiness country in the world. The chart below highlights the rankings of the top 53 countries and the full report can be downloaded here.
What is economics? |
Relative scarcity |
Opportunity cost |
Production possibility curve |
Efficiency |
Basic economic questions |
Allocative efficiency |
Technical efficiency |
Intertemporal efficiency |
Dynamic efficiency |
Markets versus planning |
What is a market? |
Demand for goods and services |
Supply of goods and services |
Equilibrium |
Shifts of demand |
Shifts of supply |
Convergence to equilibrium |
Factors influencing decision making |
Excess supply |
Excess demand |
Consumer decisions |
Producer decisions |
Government decisions |
Decisions of other groups |
Price elasticity of demand |
Price elasticity of supply |
Perfect competition |
Monopolistic competition |
Oligopoly |
Monopoly |
Market structure and efficiency |
Monopoly vs monopsony power |
Public goods |
Merit goods |
De-merit goods |
Externalities |
Abuse of market power |
Aysmmetric information |
Common Access Resources |
Externalities in production |
Externalities in consumption |
Macroeconomic activity |
Aggregate demand and supply |
Five sector model of economy |
Measurement of economic activity |
Non-market activity |
The business cycle |
Goal of strong and sustainable economic growth |
AD and AS diagrams |
Measuring economic growth |
Economically sustainable development |
Trade-off betwen economic growth and sustainability |
Alternative measures of living standards |
Why inflation is bad |
Why the RBA targets 2-3% |
Measurement of inflation |
Deflation versus disinflation |
Inflationary expectations |
Headline vs underlying |
The Phillips Curve |
Benefits vs costs of full employment |
Measurement of unemployment |
Hidden unemployment |
Underemployment & underutilisation rate |
Unemployment and participation rates |
Is the CAD a problem? |
The exchange rate |
International investment position |
Free trade vs protection |
Problems with protection |
The 'equity goal' |
Measurement of income distribution |
Absolute vs relative poverty |
Equity vs efficiency trade-off |
Costs and benefits of inequality |
Lorenz curve |
Gini-coefficient |
Henderson Poverty Line |
Cash vs underlying outcomes |
Fiscal outcome |
Medium term fiscal strategy |
BP and economic growth |
BP and low inflation |
BP and full employment |
BP and external stability |
BP and the distribution of income |
Budgetary policy and living standards |
Goals of monetary policy |
Implementing monetary policy |
Monetary policy stance |
The transmission mechanism |
Monetary policy and economic goals |
Monetary policy strengths/weaknesses |
RBA charter |
Role of the underlying inflation |
Monetary policy tightening |
Monetary policy loosening |
How other interest rates change |
Pre-emptive decision making |
'Open mouth operations' |
Exchange rate intervention |
Expansionary monetary policy |
Monetary policy neutrality |
Restrictive monetary policy |
MP to achieve low inflation |
MP to stimulate growth and jobs |
Productivity vs efficiency |
Productivity and international competitiveness |
Labour Market Reform |
Trade Liberalisation |
MRPs and internal stability |
MRPs and external stability |
MRPs and equity in the distribution of income |
MRPs and living standards |
The benefit of a flexible labour market |
immigration policy & the three Ps |
Immigration and labour markets |
Immigration and Aggregate Supply |
Immigration and the government's economic goals |
Immigration and living standards |
EMAs and section 457 visas |
Emissions Trading Scheme |
Carbon tax |
ETS vs carbon tax |
Direct action |
Strong and sustainable growth |
Low inflation |
Full employment |
External stability |
Equity in the distribution of income |
Living standards |
MC Introductory concepts |
SA Introductory concepts |
Miscellaneous |
MC market mechanism |
SA market mechanism 1 |
Miscellaneous |
SA market mechanism 2 |
SA market mechanism 3 |
MC elasticities |
SA elasticities |
Miscellaneous |
MC market structures |
SA market structures |
Miscellaneous |
SA market structures 2 |
MC market failures |
SA market failures 1 |
Miscellaneous |
SA market failures 2 |
MC macro activity/eco growth |
SA macro activity/eco growth1 |
Miscellaneous |
SA macro activity/eco growth2 |
SA macro activity/eco growth3 |
MC low inflation |
SA low inflation1 |
Miscellaneous |
SA low inflation2 |
MC full employment |
SA full employment1 |
Miscellaneous |
SA full employment2 |
MC external stability |
SA external stability1 |
Miscellaneous |
SA external stability2 |
SA external stability3 |
SA external stability3 |
MC equity in distribution of income |
SA equity in distribution of income1 |
Miscellaneous |
SA equity in distribution of income2 |
SA equity in distribution of income3 |
Miscellaneous |
MC fiscal/budgetary policy |
SA fiscal/budgetary policy 1 |
Miscellaneous |
SA fiscal/budgetary policy 2 |
SA fiscal/budgetary policy 3 |
SA fiscal/budgetary policy 4 |
SA fiscal/budgetary policy 5 |
MC monetary policy |
SA monetary policy 1 |
Miscellaneous |
SA monetary policy 2 |
SA monetary policy 3 |
MC Aggregate supply policies |
SA Aggregate supply policies 1 |
Miscellaneous |
SA Aggregate supply policies 2 |
SA Aggregate supply policies 3 |
SA Aggregate supply policies 4 |
SA Aggregate supply policies 5 |
MC Policy mix |
SA Policy mix |
Miscellaneous |
MC course revision |
SA course revision 1 |
Miscellaneous |
SA course revision 2 |
Contemporary activities 2018 |
Contemporary activities 2017 |
Contemporary activities 2016 A |
Contemporary activities 2016 B |
Contemporary activities 2015 A |
Contemporary activities 2015 B |
Videos |
Diagrams used in activities |
Google community eco teachers |
Misc videos |
Misc videos |
The Checkout season 1 |
The Checkout season 2 |
The Checkout miscellaneous |
The Corporation |
EconPop |
Freakonomics |
PPC1 |
PPC2 |
PPC3 |