Category Archives: Macroeconomics & Money

Economic and Other Ideas Behind the New Zealand Reforms

This entry was posted in Growth & Innovation, History of Ideas, Methodology, Philosophy, Macroeconomics & Money on by .

Oxford Review of Economic Policy, vol 10, no 3. pp.78-94 ( This article benefited from comments by Keith Jackson and John Martin, and from the symposium editor Gerry Holtham,)

Keywords: Growth & Innovation; History of Ideas, Methodology & Philosophy; Macroeconomics & Money;

I. Introduction

From 1984 to the early 1990s New Zealand undertook a major reform of the mechanisms used to govern the economy and the public administration. These reforms are often called ‘rogernomics’, after Roger Douglas, the Minister of Finance who instigated them, and the reformers are known as ‘rogernomes’. The reforms might be called the application of “economic rationalism”, which Michael Pusey defines as the “doctrine that says that markets and prices are the only reliable means of setting a value [for public purposes] on anything, and … that markets and money can always, at least in principle, deliver better outcomes than states and bureaucracies” (Pussey 1993:14, original’s italics).

OPTIMISM AND PESSIMISM

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Listener: 27 August, 1994. Keywords: Macroeconomics & Money; Should we be amused or amazed at the confidence of some economic commentators? While serious analysts struggle to understand what is happening, and what happened in the past, the prima donnas tell us, with a certainty only belied by their consistently poor forecasting record.   Such gloomy…
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The Meaning Of Influence

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Once more on monetary policy, the Reserve Bank and ‘control’.

Listener 21 May, 1994 This is the fourth of a sequence of four columns written in the early 1990s about monetary policy, which continue to be relevant today. They are
The Hole in the Reserve Bank
What the Reserve Bank Believes
Who Controls the Exchange Rate?
The Meaning of Influence

Keywords Macroeconomics & Money

In his April 16 reply to my Who Controls the Exchange Rate?, the Governor of the Reserve Bank tried to distinguish between “control” and “influence” of the exchange rate. Since I want to avoid arguments about words rather than things, I shall withdraw the use of the term “control”. (I was using it in the way systems engineers do.) So let me rephrase and simplify my argument.

Who Controls the Exchange Rate?

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The Reserve Bank says its influence is overrated.

Listener 26 February 1994 This is the third of a sequence of four columns written in the early 1990s about monetary policy, which continue to be significant today. They are
The Hole in the Reserve Bank
What the Reserve Bank Believes
Who Controls the Exchange Rate?
The Meaning of Influence

Keywords Macroeconomics & Money

In my last column I remarked that the Reserve Bank sometimes makes confusing and contradictory statements. In this I want to give an example.

What the Reserve Bank Believes

This entry was posted in Listener, Macroeconomics & Money on by .

Listener 12 February 1994 This is the second of a sequence of four columns written in the early 1990s about monetary policy, which continue to be significant today. They are
The Hole in the Reserve Bank
What the Reserve Bank Believes
Who Controls the Exchange Rate?
The Meaning of Influence

Keywords Macroeconomics & Money

Do the monetary policies of the Reserve Bank (RBNZ) cause unemployment? The RBNZ economists have little doubt that there is some sort of connection. I am not referring to the RBNZ’s public statements, which I find confusing and even contradictory, but to what their economists write. Monetary Policy and the New Zealand Financial System, published in 1992 (after the 1990 Reserve Bank Act), has two separate diagrams in chapters written by different economists which show linkages. A simplified summary accompanies this column.

New Zealand Can Be Different and Better, by Wolfgang Rosenberg

This entry was posted in Globalisation & Trade, Growth & Innovation, Macroeconomics & Money on by .

Review published in , Vol 3, No 3, (Issue 11) Summer 1993, p.5-6.

Keywords:Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;

Those who wish to challenge Wolfgang Rosenberg’s policy prescriptions must confront the outstanding performance of the New Zealand economy in the first part of the postwar era. In the three decades from the mid-1930s, following the recovery from the depths of the interwar depression: the economy grew as fast as – or faster than – the rest of the OECD; the rate of inflation was slightly below the average; the overseas debt was not compromising; and there was full employment, (Rosenberg puts the break point in 1975, although the last decade was not as good as the period up to 1966.)

The Hole in the Reserve Bank

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Listener 22 April, 1991. This is the first of a sequence of four columns written in the early 1990s about monetary policy, which continue to be significant today. They are
The Hole in the Reserve Bank
What the Reserve Bank Believes
Who Controls the Exchange Rate?
The Meaning of Influence

Keywords Macroeconomics & Money

When I left New Zealand in the mid-1960s there was a large hole where the Reserve Bank building was to be constructed. When I returned in the early 1970s the hole was still there. Apparently, a mistake had been made in the building’s foundations, which had to be ripped out; no easy task with the walls of a money vault. Reserve Bank foundations are like that, whether they are vault walls or the credibility of the bank’s policies.

Waist Deep in the Big Muddy?

This entry was posted in Growth & Innovation, Labour Studies, Listener, Macroeconomics & Money, Social Policy on by .

Listener 25 February, 1991

Keywords: Growth & Innovation; Labour Studies; Macroeconomics & Money; Social Policy;

A popular folk song on US campuses in the late 1960s was Pete Seeger’s “Waist Deep in the Big Muddy”. It described how one night an army platoon attempted to ford a swamp-river. The commander said he knew where he was going. It was just a matter of pushing on. Some of his troops were less certain, but were exhorted with such phrases as “don’t be a nervous nellie” and just show a little determination”.

Liberalization Sequencing: the New Zealand Case

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Journal of Economic Growth Volume 4, No 1, Winter 1989-90, p.14-18.

Keywords: Growth & Innovation; Macroeconomics & Money;

The economy of New Zealand first .surged forward under the Labour government, with registered unemployment falling from around 64 thousand at the time the new government took office in July 1984 to about 50 thousand a year later. As the restructuring took effect and firms dependent upon subsidies closed down, unemployment began to increase. By the end of 1989 it was close to 150 thousand with little prospect of significant reductions.

From Run to Float: the Making Of the Rogernomics Exchange Rate Policy

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Chapter 4 The Making of Rogernomics (AUP, 1989) pp.92-113.

Keywords: Macroeconomics & Money;

Beginning the run [1]

Whatever the political reasons for the calling of a snap election on Thursday 14 June 1984, there were many who thought that important factors were the state of the economy, the difficulty of locking up the Budget given the size of the deficit, the monetary stance, and the uncertainties of exchange rate policy.

Who Seen the Little Lamp?

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Listener: 17 December, 1988 Keywords: Literature and Culture;  Macroeconomics & Money; Political Economy & History; I was unable to attend the entire Mansfield centenary conference but I did get to the opening lecture, a brilliant inaugural address by Vincent O’Sullivan, professor of English at Victoria University. Mansfield’s status as a New Zealander has always been…
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Freeze and Thaw

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Listener: 21 July, 1984.

Keywords: Macroeconomics & Money;

The publication of the June 1984 quarter Consumer Price Index increase will revive the issue of whether the freeze was successful. While the issue will not be settled in any scientific manner for several years, the research economist needs to provide some framework for the present public debate.

Sequences

This entry was posted in Globalisation & Trade, Listener, Macroeconomics & Money on by .

Listener: 3 December, 1983.

Keywords: Globalisation & Trade; Macroeconomics & Money;

The view that there is excessive intervention in the New Zealand economy is widely accepted. Even the 1983 Budget expresses sentiments along these lines in a number of places when it reports changing the form and level of protection, the review of export assistance, decision “to move toward less disparate rates of assistance” within the agriculture and fishing sector, the decision to free up internal transport, the extension of foreign exchange licences, and the tendering of government stock, for instance.

All the Keynes Men

This entry was posted in History of Ideas, Methodology, Philosophy, Listener, Macroeconomics & Money on by .

Listener: 23 May, 1981.

Keywords: History of Ideas, Methodology & Philosophy;Macroeconomics & Money;

I once asked Dr W.B. Sutch how much Keynes had influenced the thinking of the first Labour Government. John Maynard Keynes’s book The General Theory of Employment and Money has been the most influential piece or economics writing this century in terms or its impact on both economic theory and economic policy. It explained how a government could practice deficit financing to increase employment.

Sutch, who was a government adviser in the 1930s, replied that Keynes had little influence. Rather, the government observed that housing materials were not being used, house builders were unemployed, and families desired houses, so that the Government ensured there was the finance to bring the builders and materials together to construct the houses that were needed.

Three New Zealand Depressions

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New Zealand and the World: Essays in Honour of Wolf Rosenberg ed W.E. Wilmott, (1980) p.72-87.

Keywords: Macroeconomics & Money; Political Economy & History;

The graphs which illustrated the tables are not included

By 1979 it was evident to even the conventional wisdom that New Zealand was in its greatest economic crisis since the 1930s. It is natural to ask whether there are similarities between this crisis and the earlier ones in the 1880s and the 19305, and if so, whether we can learn from our history.