Author: David Gruen, Australian Treasury

Reading The Great Crash of 2008 by Ross Garnaut with David Llewellyn-Smith encourages reflection on all the outrageous things that went on in the world’s major financial markets in the lead up to the Great Crash. You cannot read the early chapters of the book without a rising sense of anger at the self-serving and ultimately destructive behaviour on show. More importantly, the book underlines the changes needed to reduce the chances of the events of 2008 being repeated.

But my role here today is to discuss instead the book’s perspectives on macroeconomic management. I will comment briefly on three aspects of that topic: Australian exceptionalism; the consenting adult’s view of the current account; and asset price bubbles. Read more…