The Barometer of the Economy
Tues Oct 30th, 6.30pm
1/27 Hardware Lane, Melbourne
Presenter: Dr Gavin Putland
RSVP to this free event
Dr Gavin Putland discusses the role of Australia’s largest market – the land market – in influencing economic activity.
In 2001, Bryan Kavanagh found that a high ratio of property sales to GDP indicated a bubble, and that a steep decline in that ratio indicated an imminent recession. This built on the work of Fred Harrison in Boom Bust 2010 and previous writings.
On past form, according to figures available in October 2011, the decline in the ratio between 2009-10 and 2010-11 should have led to recession in 2011-12. The GDP figures for 2011-12 now indicate that there has not (yet) been a recession.
The following issues will be considered:
- Did we dodge the bullet?
- Did GDP give a misleading impression?
- Did recession set in later – just in time to blame the “carbon tax”?
- Or must we revise the threshold at which recession is predicted?
- Will revisions to the data indicate that the decline in the ratio was
not as deep as first thought?
- If so, does that mean the housing market has entered a recovery phase? – or a “bull trap” phase?
- As a predictor, how does the ratio of property sales to GDP compare with housing finance and numbers of residential sales?
- What other indicators can we use?
Dr Gavin Putland from the Land Values Research Group will deliver the latest insights into the holy grail of economics – the ability to predict future economic cycles.