The paper "Two-Speed Economic In Australia" is a good example of a macro & microeconomics case study. With the commencing of the world economic crisis and the associated great recession, the concept of the two-speed economy has turned out to be increasingly familiar with the general global community. According to Jefferson & Preston (2010), Australia has for long been a two-speed economy, with differences in terms of output growth and state employment being larger than normal in recent years. Reference to Australia as a two-speed economy has in general been taken to mean the comparatively fast rate of growth in its resources compared to the slower growth in its other sectors. On the other hand, despite being one of the Western nations to handle the global financial crisis effectively, many economists still contend that it has a two-speed economy.
As such, with increasing unemployment, income taxes, interest rates and the cost of living, the RBA and the Australian government resolved to set a policy to help develop the economy. This particular report, therefore, intends to enlighten why Australia has a two-speed economy, how the RBA sets the interest rate to reduce the gap of a two-speed economy, and how the government intends to help Australia economic growth. 2.
Two-speed Economy Jefferson & Preston (2010) define a two-speed economy as an economy whose industries are subjected to unevenly distributed growth rates. This section intends to discuss the major reasons why Australia has a two-speed economy, with specific reference to the mining resources boom, employment and unemployment rates, and disparities in terms of income. 2.1. The Mining Resources Boom As highlighted by Phil (2008), the resources boom has elicited significant debates on Australia as a nation has developed into a two-speed economy.
This has increased concerns that benefits or gains resulting from the boom accrue mostly to the Australian states where the resources are concentrated, while the other parts of the nation are hit by higher exchange and interest rates owing to the boom.
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