As you can see in my chart in the piece, I am referring to per-capita GDP, a commonly used indicator of living standards. The two countries’ statistical agencies are the source as noted in the chart note.

Our fourth main calibration result: the calibration frequency is critical. We use weekly transaction data to observe a sharp spending response (90% within 4 weeks), so we calibrate at a monthly frequency. At a quarterly frequency, the exponential version almost matches the data.

Our third main calibration result: the present-bias version of the model does a much better job of matching the joint distribution of liquidity and spending responses, with parameter values across the whole distribution that are in the ballpark of those in the recent literature.

Our second main calibration result: however, only the present-bias version of the model is able to simultaneously match the pre-withdrawal liquidity distribution and the size and speed of the observed spending response. Note the difference in predicted MPCs in the bottom row.

Our first main calibration result: both heterogeneous impatience and heterogeneous present bias can predict the withdrawal patterns we observe given average parameter values (discount factors and present-bias parameters) that are in the ballpark of those in the recent literature.

The empirical results are unchanged since the first version from March 2023. The key results are:
1) strong selection into withdrawing retirement savings on the basis of poor financial health; and
2) a very large and sharp spending response, positively correlated with selection.

During the pandemic, Australia for the first time allowed people to withdraw up to $20k from their normally illiquid mandatory private retirement saving accounts. 1 in 6 people withdrew a total of 2% of GDP. We use admin and bank transaction data to study withdrawal and spending.

Here's a new version of our paper on Australia's pandemic pension withdrawals, our third major revision. This revision brings a new title, a narrative reframing, and a major overhaul of our calibration exercise. 🧵

static1.squarespace.com/static/59b0b...

The coalition's nuclear plan released on Friday achieves its claimed cost savings not primarily by nuclear being cheaper than firmed renewables but by replacing firmed renewables with existing coal power. That results in an additional 1 billion tonnes of emissions (worth ~$180b).

See here:

My piece in today's Australian Financial Review on the public sector's crowding out of the private sector. In the past two calendar years 87% of employment growth occurred in the non-market sector despite its accounting for just 30% of jobs. In September it was 91%!

www.afr.com/policy/econo...

Enjoying an Eden Valley Riesling on this beautiful spring day.

Love to see full pass-through.

Orecchiette with Italian sausage and broccoli beats all other meals for its combination of quickness, cheapness and deliciousness. I use this recipe by Kenji and it works a treat every time. Extraordinarily good.

https://www.instagram.com/p/CgIO8EMvPdm/?igshid=YmMyMTA2M2Y=