Australian Economic Issues

4 April 2015
A critical discussion of current key macroeconomic issues and challenges faced by Australia today, including introduction to macroeconomic equilibrium and the three possible macroeconomic equilibrium conditions.

This papers discusses current key macroeconomic issues (with examples) in Australia today. It covers issues such as current account balance, employment rate, globalization, and economic growth. Evidence and recent statistics have been used to support the arguments. The second part of the paper examines the meaning and three different kinds of macroeconomic equilibrium conditions.
“There are many macroeconomic issues and challenged faced by Australia today. One of the current key macroeconomic challenges is the improvement of the current account balance. According to Taylor & Moosa, current account balance is the “value of exports minus the value of imports plus net factor income from abroad plus net transfers abroad” (2000: 425). In most recent years, Australia has had both a trade deficit and a current account deficit. The trend estimate of the current account balance was a deficit of $5,118m in December 2001 (ABS, 2001). A current account deficit means Australians receive fewer payments than they make to other countries. That is, payments to Australia for exports plus factor payments and transfer payments to Australia were less than payments by Australians for imports plus factor payments and transfer payment to other countries. If Australians receive less than they pay, then they must borrow from overseas, or equivalently, foreigners must increase their net assets in Australia.”

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