The turmoil in the world economy from Trump’s attack on Iran will delay New Zealand’s economic recovery. Back in 1993 I was perhaps the first to announce that the economy seemed to be in recovery. The notion was seized upon; apparently, the long Rogernomics stagnation was over, and economic growth would soon be booming. That…
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Industrial policy is once more on the agenda of many governments. There is a long history of Industrial Policies (IP) aimed at promoting a particular sector of an economy. When Henry VIII abandoned Roman Catholicism, the practice of eating fish on Fridays lapsed. The change devastated the English fishing industry. Edward VI, Henry’s son, reinstated…
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How successful are Trump’s measures at making America great again? War is destructive. It destroys lives, it destroys loved ones and it destroys economies. The victors’ economies suffer because a conquest is not as valuable as the rhetoric portrays and any gains go to only a select few. Even countries which are not invaded suffer…
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Canadian Prime Minister Mark Carney outlines an architecture For some decades the United States of America domination of the world has been falling. This is most obvious in economic terms. The US is no longer the world’s largest economy. It is easy to say that China is because of it has larger a population but…
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Free trade deals can be complicated; so is their analysis. We must celebrate the achievement of a Free Trade Agreement with India, but only the uninformed attribute its success solely to the current Prime Minister, Christopher Luxon, and to Todd McClay, the trade minister. The negotiations took a couple of decades involving many more politicians….
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How we connect economically with the world is critical. The British Labour Government is struggling. Partly it is because they were badly prepared in opposition; the Conservative Government was making such a charlie of itself that Labour expected that it would do better and gave little thought as to how it might. But while it…
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The pressure to globalise is consolidating towards a global world in which the US is a marginal player. There is a trope (or should I say ‘wishful hope’) by some that globalisation is coming to an end. While it may no longer moving towards a comprehensive integration, there are sites where it continues to expand….
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What can Econ101 tell us about Trump’s tariffs? Before reviewing the economics of tariffs as indirect taxes, here is a brief account of their constitutional role. In particular, in some jurisdictions, including New Zealand, taxes and therefore tariffs are the preserve of Parliament, not that of the executive or kings. England’s civil war is complicated…
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Trump may be accelerating the decline of US power. In the 2004 film Downfall (Der Untergang), which portrays Hitler’s last days in a Berlin bunker, he says that if the German people are weak they deserve death. It is a view from philosopher Friedrich Nietzsche who argued that conflicts are won by those with the…
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The budget runup is far from easy. Budget 2025 day is Thursday 22 May. About a month earlier in a normal year, the macroeconomic forecasts would be completed (the fiscal ones would still be tidying up) and the main policy decisions would have been made (but there would still be a lot of policy detail…
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A modest attempt to analyse Donald Trump’s tariff policies. Alfred Marshall, whose textbook was still in use 40 years after he died wrote ‘every short statement about economics is misleading with the possible exception of my present one.’ (The text book is 719 pages.) It’s a timely reminder that any short analysis of Trump’s tariff…
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A Bully in a China Shop? It is a mystery what Donald Trump learned when he did his BA in economics at the University of Pennsylvania in the mid-1960s. The Ivy League college has a good economics reputation, but even had Trump been a top student – unlikely or he would trumpet it – his…
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We need to think about the pattern of the economy in 2050 (or whenever), not just its level of production. Focusing on productivity (and population) growth is a trap. Long-term strategic analysis requires attention to the composition of those aggregates. Nor should we over-focus on GDP as the ultimate outcome of the economy or the…
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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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‘Perspectives of Two Island Nations’, Ann-Marie Schleich (ed), Ch 14, pp.185-194. Singapore and New Zealand have much the same population – a bit over five million people. They are both affluent economies. Because of their resource base and location, they have rather different economic structures. Yet the two small economies work together in international fora….
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.AUKUS is a backward-looking policy. The World needs to move forward. Economists think that the more interconnected countries are by trade and investment, the less likely warfare will occur between them. On many occasions countries have consciously intensified those interconnections as an alternative to war. Examples include the federation of the American states into the…
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‘New Zealand international Review’, July/August 2024, Vol 49. No 4, pp.19-20. I recall thinking when the ‘Agreement between New Zealand and Singapore on a Closer Economic Partnership’ (ANZSEP) was signed in 2001 that an agreement between the two tiny economies was a bit of a squib. In fact The deal has proved a cracker, providing…
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New Zealand is again having to reconcile conflicting pressures from its military and its trade interests. Should we join Pillar Two of AUKUS and risk compromising our markets in China? For a century after New Zealand was founded in 1840, its external security arrangements and external economics arrangements were aligned. Britain, then the international hegemon,…
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Whether Britain leaving the European Union was right or wrong, good or bad is for the Brits to decide. But there are lessons about international trade to be learned from Brexit, especially as it is very unusual for an economy to break so completely from its major training partner. In Econ101 we are taught Ricardo’s…
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In his Economists in the Cold War, Alan Bollard contrasts Saburo Okita of Japan with Zhou En Lai of China to highlight a critical issue. Saburo Okita (1914-1993) was in Manchuria (northeast China), in the port city of Darien (Chinese: Dalien) which was occupied by Japan at that time. Because they were politically unsympathetic to…
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