Economic Analysis Report: Australian Market, Competition, and Policy

This report provides an economic analysis of the Australian market, focusing on competition and government intervention. It examines the views of Ross Gittins on the fading competitive pressure in the market, where large firms dominate, pushing prices up, and impacting wages and productivity. The report also explores the role of government intervention in a mixed economy, discussing how government intervention is necessary due to market failures. It analyzes the use of monetary and fiscal policies for economic stabilization, and the importance of policymakers implementing effective policies. The report references articles by Rose (2018) and Jim (2019) to support its arguments, covering topics like the concentration of firms, the need for regulators to prevent misuse of power, and the determinants of market production and distribution of goods and services in Australia. The report concludes by emphasizing the importance of policies that encourage private investment while still ensuring government oversight.

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Name
Professor
Institution
ECONOMIC ANALYSIS

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Lack of competition in the market
According to the article written by Ross Gittins on the competition in Australia,
Competitive pressure is vital in any economic performance but it is fading. The large firms are
dominating the markets and they are pushing prices up, squeezing the suppliers and slowing the
growth in wages and productivity (Rose, 2018). Given the economic size of the Australian
market, we can conclude that large firms are not dominant in the market. The large firms do not
have a large share of the Australian output. The large markets are sometimes highly concentrated
in some markets than in others. Firms in many sectors in Australia are dominated by a few large
firms.
In the recent past, the market shares in the large firms in Australia have not changed on
average. The revenues for the firms have not grown faster than the GDP. The banking sectors
have become more concentrated while other sectors like supermarkets have been less
concentrated (Rose, 2018). On the other hand competition in the Australian market has not been
uniformly strong across the Australian economy. Some firms acquire high profits in some sectors
while in the monopoly sectors, competition is weak. This article suggests that there is a weak
competitive pressure and the economic losses are difficult to identify since they are not
dependent on profits alone but also costs.
The policymakers are supposed to intensify their policies so as to have a conducive
competitive environment. The natural monopoly regulators need to toughen regulations. There is
a need for the competition regulators to continue to focus on preventing the misuse of power.
The government is supposed to reduce the entry barriers and also make it easier for the
consumers to switch between providers and also control their own data.

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When and How To Intervene In Markets
A turning point for labor market policy in Australia
According to Mr. Jim, Australia has a mixed economy and the decision on market
production and supply are determined by the forces of demand and supply with some
government intervention due to market failure since there are no perfect markets in this case.
This article discusses the causes of government intervention in the Australian economy and the
implications of the intervention (Jim , 2019, p. 1). This article considers the fact that there are
inadequacies in markets and the responsibility that the government should take to bring balance
to the market. The article also discusses the fluctuations in the market and the responsibilities
taken by the government in bringing about stabilization in the economy.
Markets in most cases are not enough and they consider the private economic interests
but not the social interests (Jim , 2019, p. 2).The government is therefore required to change the
market outcomes. The government can stabilize the economy by utilizing monetary policy and
fiscal policy. It can also bring about stabilization in the markets by running a deficit budget. The
article has clearly explained the economic principles of monetary and fiscal policies which are
easy to follow by showing the effects of the application of each policy.
This article has discussed the mixed economy in Australia and the determinants of the
market production and distribution of goods and services.it is advisable for the policymakers to
implement policies that will not chase away the private investors while calling for government
intervention.

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References
Jim , S. (2019). A turning point for labour market policy in Australia. Economic and Labor
Relations Review, 1(1), 1-25 https://journals.sagepub.com/doi/10.1177/1035304619835075.
Rose, G. (2018, November 3rd). Weak competition may be key to economy's problems.
Retrieved November 4th, 2018, from Sydney Morning Herald:
https://www.smh.com.au/business/the-economy/weak-competition-may-be-key-to-
economy-s-problems-20181102-p50dkr.html