Bryan Kavanagh warns of financial collapse

Since the days of the first modern economist, Sir William Petty, the science of economics has gone backwards by forgetting the importance of land values — as Bryan Kavanagh writes in the Age (June 15, 2005).

Pointing to the bubble in residential land prices, Kavanagh warns that “economic growth is primed to tank into a major deflation,” so that “the next adjustment of Australian interest rates would more properly be down.”

He continues: “If we wish to arrest the decline into financial collapse, it may be time for analysts and policymakers to consider to what extent Petty's national rent offers potential to slash the taxation of productive activity.”

Read the full article.

[Posted Jan.15, 2009. Last modified Dec.13, 2009.]