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The Times


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Our economic model looks broken, but trying to fix it could be a disaster

  • Written by: Gabriele Gratton, Associate Professor of Economics and Scientia Fellow, UNSW
imageOur standard economic model says when labour is scarce, the cost of labour should increase. But something is broken. This is not happening. www.shutterstock.com

Exactly two weeks before the Reserve Bank of Australia cut interest rates to a record low, the bank’s head, Philip Lowe, outlined a predicament to the Economic Society of Australia.

It...

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