Inside the Economist’s Mind

Economic Insight
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Inside the Economist’s Mind is a podcast that opens the door to how economists think, work, and solve real-world problems. Designed for economics students, early-career professionals, and curious minds, this show explores the logic behind big decisions—combining theory, data, and modelling with practical insights from the field.

  1. CBA vs. CEA: The Economic Evaluation Tools Shaping Government Decisions

    11/15/2025

    CBA vs. CEA: The Economic Evaluation Tools Shaping Government Decisions

    Learn the different economic evaluation methods used to ensure efficient resource allocation. We explore when to use Cost-Benefit Analysis (CBA)—which converts all benefits into dollar values—and Cost-Effectiveness Analysis (CEA)—which calculates outcomes like ‘lives saved’ per dollar spent. Discover how these quantitative methods are applied ex ante to inform funding decisions and ex post to review program effectiveness. We also touch upon key considerations, including the complexity of assumptions and ethical issues like equity and discounting future generations.

    13 min
  2. The Subjective Assumptions Shaping CGE Models and Australian Economic Policy

    11/15/2025

    The Subjective Assumptions Shaping CGE Models and Australian Economic Policy

    Computable General Equilibrium (CGE) modelling is a central element of economic and policy debate in Australia, used for decisions ranging from tax reform to the approval of major projects. This report takes a deep dive into the surprising, little-known theoretical and design assumptions that fundamentally determine CGE model results and subsequent policy advice. Discover why CGE models often assume no money or interest rates, that inflation has no impact on the real economy, and that physical capital can be costlessly repurposed (meaning no stranded assets exist). Ultimately, the model results are 100 per cent determined by the subjective choices made by the modellers, often transforming these models into powerful tools of persuasion rather than objective analytical tools

    33 min
  3. Treasury Modelling Secrets: Macro Forecasts, Tax Policy & CGE/OLG Models

    11/14/2025

    Treasury Modelling Secrets: Macro Forecasts, Tax Policy & CGE/OLG Models

    Discover the complex economic models shaping fiscal advice at The Treasury. This review explores the critical recommendation to move away from the current 3-phase forecasting approach and embed a new, high-priority macro-econometric model for projections that must span greatly varying time horizons, from two up to 41 years. We analyze the crucial roadmap for the Revenue Group, focusing on upgrading its capability to use the detailed CGETAX model for analyzing tax policy impacts (covering up to twelve categories of tax). Learn why linking this CGE analysis with microsimulation models like CAPITA and PRISMOD.DIST is recommended for consistency in assessing both economic efficiency and household equity impacts. Finally, find out why Overlapping Generations (OLG) models are a medium priority for the Fiscal Group, as they are crucial tools for scenario analysis concerning intergenerational issues like retirement incomes and public debt policies.

    14 min
  4. DSGE Models: Crisis, Financial Frictions, and the Future of Macro Policy

    11/13/2025

    DSGE Models: Crisis, Financial Frictions, and the Future of Macro Policy

    Dynamic Stochastic General Equilibrium (DSGE) models are the leading, transparent tool for macroeconomic policy assessment. Discover why these models failed to predict the 2008 financial crisis, and how economists are now fundamentally improving them by incorporating crucial elements like financial frictions and addressing the Zero Lower Bound (ZLB). Learn how these complex, data-based models are used by institutions like the Federal Reserve to sharpen policymaker judgment worldwide

    14 min
  5. Australia's Economic Race: Capacity Constraints, Inflation Targets, and the Path Off the Rail | RBA Outlook

    11/12/2025

    Australia's Economic Race: Capacity Constraints, Inflation Targets, and the Path Off the Rail | RBA Outlook

    Delve into the Australian economic outlook with insights derived from the speech of Andrew Hauser, Deputy Governor of the Reserve Bank of Australia (RBA). This episode explores the "unusual challenge" facing monetary policy, noting that the GDP recovery began with the highest level of capacity utilisation in over 40 years. We analyze the RBA's decision to maintain a restrictive policy stance until confidence is achieved that underlying inflation will settle sustainably at the 2–3 per cent target range.Learn about the three potential tracks the economy could take, framed by the Melbourne Cup metaphor: 1. Track A: Still ground to make up? (Policy easing may be necessary). 2. Track B: Boxed in on the rail? (Little scope for further policy easing due to capacity constraints). 3. Track C: Off to the races? (Escape through growing the economy’s supply capacity via productivity and investment).Understand why addressing weak growth in supply capacity and driving investment is crucial for Australia to avoid being "boxed in on the rail" and instead be "off to the races.

    16 min
  6. RBA Rate Hold (3.60%): Australia's Persistent Inflation and Capacity Pressures | Nov 2025 SMP

    11/12/2025

    RBA Rate Hold (3.60%): Australia's Persistent Inflation and Capacity Pressures | Nov 2025 SMP

    In this episode of Inside's Economist's Mind, we break down the Reserve Bank of Australia’s (RBA) decision in November 2025 to leave the cash rate target unchanged at 3.60 per cent. Drawing on the latest Statement on Monetary Policy, we analyze the surprising strength of the September quarter inflation data, which was "significantly stronger than expected". Year-ended trimmed mean inflation (a measure of underlying inflation) increased to 3.0 per cent, reflecting larger-than-expected price increases in several areas. The RBA now assesses there is slightly more capacity pressure in the Australian economy than previously thought. This persistence, coupled with the strong September outcome, has led to a revised outlook where underlying inflation is expected to remain above the 2–3 per cent target range until the second half of 2026. We examine the domestic drivers of this inflationary persistence, including higher prices for new dwellings and market services (like restaurant meals and takeaway food). Finally, we discuss the mixed signals in the labour market, where conditions have eased slightly (the unemployment rate increased to a quarterly average of 4.3% in September) but indicators like unit labour costs and high capacity utilisation still point to residual tightness.

    14 min
  7. Critical Minerals War: US & Australia Challenge China's 'Iron Grip' on Rare Earths Supply Chains

    11/06/2025

    Critical Minerals War: US & Australia Challenge China's 'Iron Grip' on Rare Earths Supply Chains

    In this episode of "Inside the economist's mind," we dissect the historic United States–Australia Critical Minerals Framework, a strategic partnership signed by Anthony Albanese and Donald Trump designed to challenge China’s near-complete hold, or "iron grip," over the essential materials required for global industries. The 8.5billiondealbetweenthealliesinvolvesacommitmentofatleast∗∗US1 billion from both the US and Australia** towards a pipeline of rare earth mineral projects. We explore how this agreement aims to secure mineral supplies for both countries' commercial, clean energy, and defense industries, particularly advanced military hardware. Key projects receiving capital injections include a proposed gallium plant in Western Australia (to be co-located at an Alcoa alumina refinery), and the Arafura Rare Earths project in the Northern Territory, which plans to produce oxides like neodymium and praseodymium, crucial for magnets used in wind turbines and ballistic missile guidance systems. Gallium is vital for modern military technologies, such as radar and missile guidance technology, and the US is currently wholly dependent on China for its import. However, the effort faces significant economic challenges. China has maintained its dominance through strategic tactics, including price manipulation of unprocessed rare earths to undercut rivals, and has recently expanded export controls on rare earths used by the US defense sector. While the framework includes measures to develop price floors to stabilize the market for new producers, economists note that the sector is so politicized that government money often acts as a necessary subsidy. We discuss the strategic shift required, noting that raw supply diversification is meaningless without establishing midstream refining and processing capacity outside of China. Furthermore, the deal is explicitly designed for delivery to American and Australian buyers, raising questions about how China, the world’s dominant buyer of high-grade magnet materials, will respond

    15 min
  8. The Barossa Billions: Methane Cover-Up, Zero Royalties, and Australia's Looming Gas Export Crisis

    11/06/2025

    The Barossa Billions: Methane Cover-Up, Zero Royalties, and Australia's Looming Gas Export Crisis

    This episode dives into the massive, yet highly controversial, Barossa offshore gas project, operated by Santos. Approved amidst an election campaign focused on gas exports, Barossa is one of the most polluting new gas projects under development in Australia. We explore the dual controversies surrounding the project: 1. The Darwin Methane Leak Scandal: The Barossa project relies on extending the life of the existing Darwin Liquefied Natural Gas (DLNG) plant. Confidential documents reveal a "dirty secret": a design fault dating back to 2006 caused a major methane leak from the DLNG storage tank, a highly potent greenhouse gas up to 80 times more harmful than CO2. Estimates of the leak have varied, ranging up to the equivalent of millions of tonnes of CO2, or more than 8,000 new cars on the road every year it is in use. Critics call the handling of this leak a "national scandal" and a "cover-up" by Santos, ConocoPhillips, and regulators. Despite the opportunity to repair the faulty tank while it sits empty, Santos has chosen not to, deeming the decision a commercial one, and regulators have not forced a fix. 2. The Export/Tax Paradox: Barossa highlights a core flaw in Australia's energy policy. The project is expected to deliver long-term cash flows and supports energy security in Asia. However, The Australia Institute notes that Barossa will pay no royalties on the gas it extracts, and like other gas exporters, none have ever paid the Petroleum Resource Rent Tax (PRRT). Excessive gas exports have been blamed for causing Australian domestic gas and electricity prices to triple, leading politicians to propose forcing exporters to divert uncontracted gas to Australian customers. Despite being the world’s second-largest LNG exporter, Australia is now preparing to import significantly more expensive LNG (Asian spot prices are far higher than domestic production costs) to cover pending supply shortfalls in the southern states. We detail how the BW Opal Floating Production, Storage, and Offloading (FPSO) vessel recently arrived and was successfully hooked up at the Barossa field, keeping the project on track for first gas in the third quarter of 2025, while examining the massive investment in local jobs, training, and the Barossa Aboriginal Future Fund (BAFF). This episode asks: Can Australia justify approving massive, high-polluting export projects that pay little tax, while consumers face tripled energy costs and regulators allegedly enable a methane cover-up?

    16 min
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About

Inside the Economist’s Mind is a podcast that opens the door to how economists think, work, and solve real-world problems. Designed for economics students, early-career professionals, and curious minds, this show explores the logic behind big decisions—combining theory, data, and modelling with practical insights from the field.

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