Category Archives: Macroeconomics & Money

Net National Savings and the Real Exchange Rate

This unpublished paper contains figures in its full version. Unfortunately I can’t work out how to include them. I’ll send the figures if requested. Summary This paper derives a locus between the real exchange rate and net national savings (gross savings less gross investment). Its essence is that a rise in net savings reduces the…
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The Relationship Between the Net National Savings and the Real Exchange Rate

A note prepared in October 2012   Keywords: Macroeconomics & Money;   Summary   This paper derives a locus between the real exchange rate and net national savings (gross savings less gross investment). Its essence is that a rise in net savings reduces the real exchange rate. Conversely a rise in dis-savings increases the real…
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The ‘Critical Threshold’ for Fiscal Projections and Policy

A Note prepared in October 2012.   Keywords: Macroeconomics & Money; Regulation & Taxation;   Introduction   I have argued there is a critical threshold where if the fiscal deficit exceeds it public debt grows unsustainability faster than the ability of the economy to service it (usually measured by GDP). This note quantifies the threshold…
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Another Financial Crisis on the Rise?

Listener: 29 September, 2012. The world economy remains fragile. There may be another major economic crisis, but if not, things will continue to drift – or possibly sink. Here are some of the major known unknowns facing the world – and us. It’s hard to say much about the United States economy. The country is…
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A Framework for an Economic Strategy

A note prepared for discussion in September 2012.   Keywords: Business & Finance;  Distributional Economics; Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;   What is the Purpose of the Economy? * The purpose of the New Zealand economy is to maintain and increase the wellbeing of all  New Zealanders. It is neither the…
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Economic Uncertainty

St Andrew’s Study Trust lecture series: Living with Uncertainty; 4 September 2012 The notion of uncertainty – and risk, which as we shall see, is something else – is central to economics and the economies it describes. Of course there are external events which generate shocks like the Lisbon or Canterbury earthquakes. But today I…
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Chartering Through the Long Recession

Listener: 23 June, 2012 Keywords: Education; Macroeconomics & Money; Naomi Klein’s The Shock Doctrine opens with a description of the American neo-liberals using Cyclone Katrina’s devastation of New Orleans as a chance to replace the city’s public school system with charter schools. This is but one of the book’s examples of their seizing opportunities following…
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Government Budgets: the Ceremony and the Reality

Listener: 9 June, 2012. Keywords: Macroeconomics & Money; The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity Despite the media extravaganza that still surrounds them, government Budgets are no longer the major economic statement of the year. The Government now has so many opportunities at…
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Could Auckland Have a Greek Crisis?

Submitted to ‘New Zealand Herald’ but mot published. Keywords: Governance; Macroeconomics & Money; Could New Zealand have a financial crisis like the current Greek one? Anything is possible but the central government has a formidable series of institutional arrangements to reduce the probability of it happening together with prudently committed ministers of finance. History reminds…
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Problems with Experts

PROBLEMS WITH EXPERTS New Zealand Books, Winter 2012, p.9. Keywords: Macroeconomics & Money; Regulation & Taxation; The New Zealand Economy: An Introduction by Ralph Lattimore & Shamubeel Eaqub (AUP) 170pp. $34.99. ISBN: 978-1-869404-89-5 The New Zealand Tax System: New Zealand Taxes in Comparative Perspective by Rob Salmond (Institute of Policy Studies) 129pp. $30.00. ISBN: 978-1-877347-45-0…
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The Issues New Zealand Faces: the International Context

Presentation for the Wellington Branch of the NZIIA, 15 May 2012 Keywords: Globalisation & Trade; Macroeconomics & Money; Next week, the government will present its annual budget to parliament. There will be a lot more media space given to it than – say – to this paper, but its significance is much less than is…
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NZ Government’s Influence on Economic Growth

Listener: 26 April, 2012. Keywords: Growth & Innovation;  Macroeconomics & Money; New Zealand has had two great economic booms – during the Liberal era from about 1895, and from about 1935 while the first Labour Government was in power. In each case, per capita GDP doubled in about a decade; each followed a depression (since…
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New Zealand Should Tax Financial Transactions

Listener: 17 Match, 2012. Keywords: Macroeconomics & Money; Regulation & Taxation; Eminent economist James Tobin in 1972 suggested a financial transaction tax on spot-market currency conversions. Many others have supported him. That includes people who don’t like money and think of a financial transaction tax as a sin tax. (Tobin certainly did not. He was…
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A Canterbury Earthquake Levy Would Be Prudent

Listener: 3 March 2012. Keywords: Macroeconomics & Money; Regulation & Taxation; Forecasts for the New Zealand economy have been wound back since last year. Given the deteriorating state of the world economy, they will probably be wound back even further. And that’s going to make it even harder for the Government to meet its election…
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The Course Of Prices: 1860 to Today

An appendix for Not in Narrow Seas: New Zealand History from an Economic Perspective The work was funded by a grant from the Reserve Bank of New Zealand which is not responsible for any errors or interpretations. A version was presented to an RBNZ seminar on 1 March 2012. Keywords: Macroeconomics & Money; Political Economy…
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Germany Must Makes Adjustments Too

GERMANY MUST MAKES ADJUSTMENTS TOO Listener: 4 February, 2012. Keywords: Macroeconomics & Money; A decade ago, the Economic and Monetary Union (EMU) replaced 17 European currencies with the euro, locking their nominal exchange rates together. Germany decided its wage and price structure was too high. This made it more likely Germans would buy imports and…
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