Australia Kissed Recessions Goodbye

A blog about business and economics.
Feb. 24 2012 1:57 PM

How Australia Kissed Recessions Goodbye

139643570
Australia's embattled Prime Minister Julia Gillard speaks during a press conference in Melbourne on February 24, 2012.

Photo by CAROLINE PANKERT/AFP/Getty Images

Australia is currently undergoing an amusing leadership battle between two titans of the Labor Party, incumbent Prime Minister Julia Gillard and Foreign Minister Kevin Rudd who used to be Prime Minister until his then-deputy Gillard deposed him in a swift intra-party coup. Perhaps related to the relative lack of substance in the leadership battle, Australia is awesome at fighting recessions. While American economic commentators have looked at two straight long "jobless" recoveries and concluded that the very structure of the world economy has changed, Australia . . . just skipped those recessions:

1330109598201

I would sugges that not coincidentally, while Australia is better than the USA at avoiding prolonged periods of agonizing mass unemployment and wage stagnation, they're not as good at generating consistently low and stable inflation:

1330109660281
Advertisement

People sometimes try to tell you that Australia is just a story about commodities exports to China, but I think the inflation numbers are telling. Around the late-90s boom, Australia's inflationary peak was much larger than ours and then when they corrected downward they weren't as aggressive about it as the Fed was. After the global financial crisis the US CPI slipped into negative territory specifically because of tumbling commodity prices, but commodity-oriented Australia kept inflation positive and then re-inflated a bit. These things can be done if you want to do them.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Meet the New Bosses

How the Republicans would run the Senate.

Even by Russian Standards, Moscow’s Anti-War March Was Surprisingly Grim

I Wrote a Novel Envisioning a Nigerian Space Program. Then I Learned Nigeria Actually Has One.

The Best Thing About the People’s Climate March in NYC

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

A Futurama Writer on How the Vietnam War Shaped the Series

Trending News Channel
Sept. 20 2014 11:13 AM Watch Flashes of Lightning Created in a Lab  
  News & Politics
The World
Sept. 22 2014 12:30 PM Turkey Just Got Forty-Six Hostages Back From ISIS. How Did That Happen?
  Business
Moneybox
Sept. 22 2014 12:44 PM The U.S. Is So, So Far Behind Europe on Clean Energy
  Life
The Shortcut
Sept. 22 2014 12:31 PM Down With Loose Laces A simple trick to tighten your running shoes for good.
  Double X
The XX Factor
Sept. 22 2014 12:29 PM Escaping the Extreme Christian Fundamentalism of "Quiverfull"
  Slate Plus
Science
Sept. 22 2014 8:08 AM Slate Voice: “Why Is So Much Honey Clover Honey?” Mike Vuolo shares the story of your honey.
  Arts
Brow Beat
Sept. 22 2014 12:22 PM The Age of the Streaming TV Auteur
  Technology
Future Tense
Sept. 22 2014 12:14 PM Family Court Rules That You Can Serve Someone With Legal Papers Over Facebook
  Health & Science
Science
Sept. 22 2014 12:15 PM The Changing Face of Climate Change Will the leaders of the People’s Climate March now lead the movement?
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.