What is PREFU 2023 really telling us? Despite the headlines, things are not much worse than at the time of the 2023 budget, but fiscal management is always difficult. The Treasury is required by law to publish a Pre-election Economic and Fiscal Update (PREFU) a few weeks before a general election, just as it is…
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Evergrande and Country Garden – two giant Chinese property development companies – are a portent of the turbulence before us. The recent financial failures of two ginormous Chinese property companies, Evergrande and Country Garden, at various times ranked the second largest and sixth largest in China have implications for the New Zealand economy. The Evergrande…
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Do I detect increasing uncertainty as to the effectiveness of monetary policy to deal with inflation? It may be helpful for an understanding what is going, to recount the conventional wisdom before ‘monetarism’; that term was coined in 1968 so I was there before it and recall some of the debate leading up to it….
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Circulated 13 April 2023 There is a fetish for setting performance targets in, among other places, the education and health system. This note draws on economists’ experiences to caution about their use, and illustrates how this has mattered in the health system. The foundation principle is Gilling’s Law which states ‘how the game is scored…
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Working Paper for New Zealand Productivity Commission Introduction Unexpected shocks to the New Zealand economy are endemic. The numerous small ones have been dealt with by the local initiatives inherent in the market economy and by common sense. However, there are a few big shocks where national action has been necessary. Sometimes those actions have…
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Jasfest, 7 December 2021 I apologise for not presenting this short tribute to Jas. I have had a tumour removed from my larynx. The prognosis is good, but it will take some time for my voice to recover sufficiently to be able to make presentations. I want to talk about Jas as a macroeconomist, but…
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Now is about the time that the Government is getting its Budget Strategy together In the week before the budget – the 2021 one is to be delivered on Thursday 20 May – there is a strange ritual in which all the commentariat and lobbyists (who are not necessarily distinct from one another) tell us…
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Introduction: The focus of this paper is on macroeconomic management and not on the entirety of economic policy. There are many issues which macroeconomic interventions cannot address. To use macroeconomic instruments, rather than the relevant targeted instrument, will blunt the effectiveness of macropolicy interventions. Reflecting, this paper is really a critique of the current primary…
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The Treasury forecasts suggest the economy is doing better than expected after the Covid Shock. John Kenneth Galbraith was wont to say that economic forecasting was designed to make astrology look good. Unfair, but it raises the question of the purpose of economic forecasts. Certainly the public may treat them as horoscopes which is usually…
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I was writing almost weekly about the Covid Crisis during its peak of between March and June 2020. Not that I had any technical expertise in the area (in the following please allow for that) but its impact on economics areas where I had some expertise was great. Here is a list of the Pundit…
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I prepared this note on the contribution of Joseph Stiglitz of the same title to an important symposium in Oxford Review of Economic Policy, Volume 34, Numbers 1–2, 2018 (pp. 70–106). It is for economists. A shorter version is published in the AUT Briefing Papers series. Stiglitz’s text is in italics: I believe…
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Is public spending stuck in the vicelike grip of the austerity of our quasi-Austerian economic policy? Are we at a turning point in our politics? I don’t mean whether we have a new government. That is a matter for the voters; the polls say that either they are very volatile or that the polls are…
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The just published PREFU, Treasury’s assessment of the economy, raises more important questions about our fiscal stance than what the election is talking about. Have we the right borrowing strategy? It was amusing how the Minister of Finance, Stephen Joyce, had to present the PREFU (Pre-election Economic and Fiscal Update) as both an optimistic account…
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The policy dimension of the election appears to be about the concerns with past restraints on government spending and the consequential social failures. But whatever the rhetoric, implementation of campaign promises is going to be much harder. Last Saturday, the Minister for Social Housing, Amy Adams, admitted her government had a poor record on social…
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The following is a ‘pundit column’, which was never published because the 2017 election swept it aside. Our carbon emissions regime is costing us a fortune; why are we not doing something about it? Suppose an item of government spending blew out from virtually nothing a few years back to more than $400m a year…
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By exploring the multiple worlds she grew up in in New Zealand, Helene Wong’s memoir ‘Being Chinese: A New Zealander’s Story’ tells us much about our worlds too. Economists have a predilection for the open economy because, I think, openness to trade tends to be associated with openness to ideas, to technologies, to people, to…
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Much of the commentary on the budget was shallow. What is really going on is that the changes are small but they reflect a particular political perspective. The financial threat was hardly discussed Allow me to be irritated by the trivial discussion which surrounds the government’s annual budget. The budget is simply the government setting out…
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This paper on public debt strategy is published as an AUT Briefing paper. It is available here.
Are Labour’s proposals for the changing the way the Reserve Bank operates sensible or nutty (as nutty as the current legislation)? Section 8 of the 1964 Reserve Bank of New Zealand Act stated that ‘monetary policy of the Government … shall be directed to the maintenance and promotion of economic and social welfare in New…
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Is the fiscal pact between Labour and the Greens a defeat for the left? The parliamentary left seems cowed by the neoliberals if the fiscal pact between Labour and the Greens is anything to go by. This column focuses on their fourth promise which observes that ‘Core Crown spending has been around 30% of GDP…
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