Credit Suisse PB: Downside Risks to Australia's Economy Have Risen

The video discusses the economic outlook for Australia, highlighting risks from bushfires and coronavirus. It emphasizes the importance of fiscal and monetary policy coordination to utilize low interest rates effectively. Challenges of low rates are explored, noting that other policies are needed to stimulate the economy. The potential impact of economic measures on unemployment and labor hoarding is also discussed.

What recent events have increased the downside risks to the Australian economy?

• Political instability

• Bushfires and coronavirus

• Technological advancements

• Global warming

Why is coordination between fiscal and monetary policy important during economic crises?

• To reduce government spending

• To ensure low interest rates are effectively utilized

• To increase taxes

• To increase inflation

What is a major limitation of relying solely on low interest rates to boost the economy?

• It increases inflation

• It does not address changes in consumer behavior

• It leads to higher taxes

• It reduces government revenue

What fiscal policy measure is suggested to help companies during supply side shocks?

• Subsidies for new startups

• Increase in corporate taxes

• Incentives to retain labor force

• Reduction in export tariffs

What could be a consequence of prolonged weak domestic demand in the Australian economy?

• Rise in unemployment rate

• Increase in full-time employment

• Decrease in labor productivity

• Increase in export demand