By way of prologue, the closest parallel to the current economic situation may be when Ruth Richardson became Minister of Finance in late 1990. The economy had been contracting, although there were signs of a fragile recovery. She was an Austerian and cut public spending savagely. The economy plunged a further 5% in GDP per…
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This was offered to a media outlet ‘accepted’ but not published. Excerpted from the just published In Open Seas. The Labour Party halved its vote between the 2020 and 2023 elections (while National barely increased voter numbers). The coronial enquiries into the last election are yet to be held, but they will conclude Labour’s loss…
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How the Prospect Theory of Behavioural Economics Makes Economic Analysis Difficult Behavioural economics has been described as the most revolutionary thing which has happened to economics for ages. The notion that people do not behave like ‘rational economic men’ (women are mainly ignored) undermines the microeconomic foundations of the subject. Not the empirical evidence on…
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Brian Easton Published in 2024 by Kea Point ISBN 978-0-473-72573-0 380 pages The book is rich in analyses of policy directions to progress Aotearoa New Zealand. An account of the policy development of the Ardern-Hipkins New Zealand Labour Government (2017-2023) which focuses on its policies in the context of New Zealand’s longer term economic history,…
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The Dangers of Delusions of Grandeur This is a column about MAGA – Make America Great Again. But as a prequel I scroll back sixty years to when I was teaching in England. I have fond memories of the students – bright and personable as they were. But their attitudes to England and the world…
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Notes for a Friend Te Tiriti gave ‘kawanatanga’ (governance) to the Crown but ‘rangatiratanga’ to Iwi (I’ll come to a complication). ‘Sovereignty’ confuses the discussion because it could be either kawanatanga or rangatiratanga – the sovereignty of the state vs the sovereignty of the individual. The governance vision in 1840 was a minimalist state. The…
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Some analysis by a social statistician. A note for myself. On 20 November 2024 around 42,000 people crowded in and around Parliament Grounds nominally protesting against the Treaty Principles Bill after a Hīkoi which came from the North Cape and the Far South. What exactly was going on was more than just a protest against…
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Property rights – which enable decisions over tangible and intangible assets – are critical to an economy as Why Nations Fail pointed out. Not just private property rights for, as we shall see, they are more complicated than that. Neoliberals argue that private property rights lead to the maximum economic prosperity; they used that to justify privatisation….
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This was a note I prepared for myself International experience provides very little guidance to the problem of designing an effective health system; there is little structural convergence between the health systems of affluent countries on the supply-side. One almost universal exception to this pessimistic conclusion is that the funding of a health system needs…
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The current rise of populism challenges the way we think about people’s relationship to the economy. We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. The re-election of Donald Trump is…
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Does the Autumn 2024 British budget point to a change in fiscal strategies? Many countries found their fiscal position was unsustainable, following the 2008 Global Financial Crash. Their public spending was well in excess of their public revenue and they had to borrow more heavily than lenders thought prudent. Almost unanimously, such countries tried to…
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Last week’s column mentioned the three 2024 Nobel laureates in economics. The column focused only on the 2012 book Why Nations Fail by Daron Acemoglu and James Robinson with little reference to Simon Johnson, although the three have worked closely together for about 30 years. Johnson published last year, with Acemoglu, a 599-page book: Power and Politics: Our…
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This year’s Nobel awards in economics raise critical issues about the future of the world. I was not alone with high hopes when the Soviet Union collapsed. It has been good to see various nations leave the yoke of the Soviet Empire and move towards liberal democracies with thriving economies although sometimes it has been…
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A note written for some younger economics colleagues. I was lucky when I was on the Treasury Forecasting Panel (from about 1998 to 2008) that Jas McKenzie was on it too and we could discuss our experiences. Generally, our approach was that they were the Treasury forecasts and that our task was to help them…
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Healthcare sector management needs to break away from its obsession with financial information and focus on funding for access. Health New Zealand recently ‘proactively released’ 454 pages about its financial performance to July 2024. Here is a letter it did not release. Hon Dr Shane Reti, Minister of Health. Dear Minister. We have been deluging…
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What might the public’s increasing demands for safety and security tell the economist? Criminology and economics are quite different disciplines. Someone from one discipline trespasses on the other with the greatest of caution, something which, I’m afraid, not all economists have. There is a foolish economics literature about the ‘optimal level of crime’. Before it…
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Today’s mañana strategy will lead to a crisis for the oldest elderly. It is said that the only certainties are death and taxes, but a lack of each causes uncertainties. As longevity increases, the pressures on state spending increase. A reluctance to increase taxation means the pressures on the elderly increase. The dilemma is usually…
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Neville Gibson Reviews In Open Seas NBR Sun, 29 Sep 2024 Surprisingly, little has been forthcoming from the academic world about where and why the Sixth Labour Government went wrong, except for an analysis of the 2023 election. But whenever there’s an intellectual gap, someone must fill it. Brian Easton, a doyen among economists and…
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Stagnation and Contraction In this column I use the less familiar measure of GDP per capita instead of the GDP measure favoured by the commentariat. I became familiar with it when I began doing international comparisons because of the population differences between countries, while I depended upon the measure while working on New Zealand’s economic…
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Congestion pricing is easier said than done. The first seminar I attended in Britain – around sixty years ago – explained a scheme for road usage pricing which would eliminate traffic congestion and direct roading investment. It was impressive and elegant (as many such seminar propositions are) but proved impractical and costly to implement (ditto)….
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