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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AUT Briefing Papers March 27, 2018 There is a slowly but steadily accumulating body of criticism of the dominant economic paradigm which constitutes today’s conventional wisdom. A recent Oxford Review of Economic Policy devoted an entire issue to critiquing ‘Dynamic Stochastic General Equilibrium’ (DSGE) models, a workhorse of econometric forecasting based on much of the current thinking….
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December’s Half Year Economic and Fiscal Update (HYEFU) was combined with the Government’s plans for its first 100 days. Each December, six months after the budget, the Treasury reports on the state of the economy and the government accounts. Since the August Pre-election Economic and Fiscal Update nothing much has happened in the macro-economy, so…
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So claims Niall Ferguson, professor of history at Harvard. (These are notes prepared for a Radio New Zealand ‘Nights’ Pundits conversation with Bryan Crump. Tuesday 12 December 2017.) Niall Ferguson is known for his provocative, contrarian views and a number of books, including The Ascent of Money. I am not in a position to judge…
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The retirement of the Governor of the Reserve Bank of New Zealand leads to a reflection on what has been really going on. During Graeme Wheeler’s five-year term as the Governor of the Reserve Bank (RBNZ), consumer prices rose 1.05 per cent annually. He had a Policy Target Agreement with the Minister of Finance ‘to…
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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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AUT Briefing Papers July 18, 2017 Historically housing prices in New Zealand have risen a little faster than consumer prices, but the increase has been sharper since 2001, except for the period when the Global Financial Crisis impacted. I have graphed data from the Reserve Bank of New Zealand to see what the relationship is…
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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.
AUT Briefing Papers May 24, 2016 As a general rule, New Zealanders want more public spending. Surveys (such as the 2014 Election Survey) show consistent support for increases in spending, particularly in the areas of health, education, housing, law enforcement, public transport and the environment (in that descending order) as well as favouring reduced income inequality….
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