My team of the year is the Reserve Bank of New Zealand. Listener: 27 December, 2008 Keywords: Macroeconomics & Money; United States President-elect Barack Obama talks about a “crisis of historic proportions”. We are certainly in the midst of New Zealand’s greatest financial crisis, far more serious than the 1984 run on the dollar,…
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Why we shouldn’t have a tax cut right now. Listener: 13 December, 2008 Keywords: Macroeconomics & Money; With the world in financial turmoil and entering an economic downswing, many of those who once abused Keynesian economics are now clamouring for what they think are Keynesian policies. Unfortunately, their view of Keynesian economics was overly…
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Address to the Wellington Branch of the Institute of Directors, 4 December, 2008. Keywords: Macroeconomics & Money; When I was invited to address you, it was suggested I should – in the spirit of the season – say something light. After all, we are about to break for a few weeks to be spent with…
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Cycles and Depressions in New Zealand History This is a revised version of a paper given to IPS seminar, 22 November 2008. It is similar to the article published in Policy Quarterly, Volume 3, No 1, February 2009, pp.17-23. Keywords: Macroeconomics & Money; Political Economy & History; Introduction It is said that a banker’s most…
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Is the global “millennium recession” arriving too late? Listener: 15 November, 2008. Keywords: Macroeconomics & Money; The world “millennium recession” I wrote about in 2002 never eventuated. So what happened to it? The short answer is that the Bush administration increased the US Government deficit by spending more (especially on warfare) and cutting taxes (so…
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Notes for an IPS Seminar 6 November, 2008. Keywords: Macroeconomics & Money; Social Policy; This One Will Be Different New Zealand is going into what seems likely to be a long recession. We dont know how long nor how deep, nor the precise events that will drive it. There is not space…
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Hard times are ahead – and they won’t be over soon. Listener: 1 November, 2008. Keywords: Macroeconomics & Money; The financial boom is over, as is its artificial stimulus of the world economy. Its excesses are unwinding in a broadly predictable manner. I can’t tell you the exact timing, nor the details. but we have…
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Choosing the vanilla type of financial institution has its advantages. Listener: 18 October, 2008 Keywords: Macroeconomics & Money; The more speculative end of the financial system is a casino, according to economist John Maynard Keynes. You gamble with your money: if you’re lucky you win more; if not you eventually lose it. The plain vanilla…
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An “exclusive” interview with economist Dr Brian Easton. Listener: 6 September, 2008. Keywords: Macroeconomics & Money; Listener Economic Columnist (LEC): I thought Keynesianism didn’t work? Brian Easton: The theory is unfashionable among certain groups, but among professional economists, it has been the most important way economists have thought about the whole…
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From manic muddle to melancholic mess. Listener: 23 August, 2008. Keywords: Macroeconomics & Money; Suppose a volcano erupted in Auckland, a tsunami drowned the Bay of Plenty, a major earthquake shook Wellington, or foot-and-mouth disease broke out in the South Island. Would you expect the Reserve Bank to tighten its monetary…
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Bill Phillips is Up There with the Greats. Listener: 12 July,2008 Keywords: History of Ideas, Methodology & Philosophy; Macroeconomics & Money; Economists from all over the world are meeting in Wellington over the next couple of weeks to celebrate New Zealander Bill Phillips and the paper he published 50 years ago. This paper introduced what…
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The text of the display celebrating Bill Phillips, opened in the Reserve Bank of New Zealand Museum on 7 July, 2008. The text is written around various images, but may be of some value without them. I should like to acknowledge the Phillips Family, the New Zealand Portrait Gallery, the Reserve Bank Knowledge Centre, 3D…
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Cutting ‘wasteful’ public spending will not be easy. Listener: 28 June, 2008. Keywords: Macroeconomics & Money; Regulation & Taxation; The other side of taxation is government spending. Reducing tax levels means government outlays have to be reduced too, if not immediately then eventually when the borrowing is repaid. So when someone says, “We should cut…
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Aftershocks from the liquidity earthquake. Listener: 14 June, 2008. Keywords: Macroeconomics & Money; Regulation & Taxation; It is usually assumed that light-handed regulation works where there is a competitive market, with backing legislation, such as the Commerce Act and the Fair Trading Act, and a judicial process that vigorously enforces the law. (A decade ago,…
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Are journalists making the economic situation seem worse? Listener 31 May, 2008 Keywords: Macroeconomics & Money; Statistics; What is happening to journalism? You will recall that, last year, journalists campaigned for tax cuts based on a total misunderstanding of the Government accounts. They used the wrong measure of the Budget surplus, which…
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The liquidity drunks have taken over the economic asylum. Listener: 3 May, 2008 Keywords: Macroeconomics & Money; The standard explanation of the ongoing world financial crisis is that the United States Government has been running a huge fiscal deficit, which has poured liquidity (cash and near-cash) into the world economy. This facilitated…
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The state should share its windfall from the housing boom. Listener: 19 April, 2008. Keywords: Macroeconomics & Money; Social Policy; We are not thinking clearly about the housing market. If higher interest rates could not restrain higher housing prices, why will lower ones solve the current problems? There are two major concerns, other…
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Alan Bollard’s not a Grinch, he’s just doing his job. Listener: 5 April, 2008. Keywords: Macroeconomics & Money; Last October, Alan Bollard, Governor of the Reserve Bank, broke an implicit constitutional convention when he said that if this year’s tax cuts were too generous, he would have to tighten monetary policy. Governors have long muttered…
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The days of having a dominant world currency are coming to an end. Listener: 9 February, 2008. Keywords: Globalisation & Trade; Macroeconomics & Money; When a barrel of oil rose to $US100, it also cost E69, $NZ130 and at least 200 million Zimbabwean dollars (at the unofficial exchange rate). There was some…
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Ignore the happy brigade. The forces of recession are already in motion. Listener: 1 December, 2007. Keywords: Macroeconomics & Money; Larry Summers, the best economist ever to have been Secretary of the US Treasury, points out that major international financial crises occur about every three or four years. The last – the…
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