AUT Policy Observatory May 2017 About this report This report is part of an ongoing series on urgent contemporary policy issues in Aotearoa New Zealand. This series has an objective of bringing academic research to bear on the economic, social and environmental challenges facing us today. The Policy Observatory Auckland University of Technology Private Bag…
Continue reading this entry »
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…
Continue reading this entry »
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…
Continue reading this entry »
The times are a’changing, as recent macroeconomic fashions are being abandoned and old verities are being restated. Alan Blinder, an American economist, described as ‘one of the great economic minds of his generation,’ was an economic adviser to President Clinton and was a Vice Chair of the American Federal Reserve (central bank). He is known…
Continue reading this entry »
Pretending it can, or that the Reserve Bank of New Zealand can function independently from the rest of the world, could generate a financial crash. The very joining of monetary policy and fiscal policy into a single phrase is a criticism of the neoliberal macroeconomics. The reconfiguration under Rogernomics assumed that the two could be…
Continue reading this entry »
Paper to the Fabian Society, 12 October, 2016 While we continue to chew over the carcass of the Fourth Labour Government – the Lange-Douglas one – we pay little attention to the subsequent Fifth Labour Government. Yet the Clark-Cullen one is greatly shaping the current Labour Opposition and the current National Government. It will,…
Continue reading this entry »
What are the possibilities for the future housing prices? What can we do? Two eminent but retired Reserve Bankers, Don Brash and Arthur Grimes, have argued that house prices should halve. I am not sure whether they actually mean it or are just vividly pointing out that house prices are about double the sustainable level….
Continue reading this entry »
AUT Briefing Papers August 18, 2016 While housing obviously fills a need – people need somewhere to live – it also has an investment aspect. How this investment is treated by the tax system influences the housing market, and the investment available for other purposes, such as business ventures. There is an implicit tax-subsidy to…
Continue reading this entry »
The Reserve Bank cannot deliver affordable housing by itself. Its actions have to be coordinated with the government’s. Unfortunately the monetarist framework of the Reserve Bank Act obscures this. The tensions between the Reserve Bank and the Government over housing policy go back to the mistaken economic thinking in the 1989 Reserve Bank Act. Monetarism…
Continue reading this entry »
AUT Briefing Papers May 30, 2016 Despite the public’s desire for more government spending there has been little increase in the aggregate level of government spending relative to GDP over the last 20 years. There was a slight rise immediately after the GFC, because GDP stagnated. Government spending as a percent of GDP is now lower that…
Continue reading this entry »
A major preoccupation of the budget was preparing for the next major financial crisis. To do so it is reducing government spending relative to GDP. Where do tax cuts fit in? Our politics reminds me those weekly serial movies where each week the heroine ends in an impossible situation but next week she miraculously escapes…
Continue reading this entry »
AUT Policy Observatory May 2016: The original is here. Contents Page 1. Why Government Spending is Necessary 4 2. The Public’s Demand for Public Spending 11 3. The Long-Term Record of Government Spending 15 4. Recent Trends in Public Spending 27 5. How Taxation Fits in …
Continue reading this entry »
If it necessary to run a budget deficit then it should be spent in the interests of future generations, rather than on increased consumption to be paid for in the future. It is very easy to demand the government should run, or increase, its budget deficit, that is, it should spend more than its revenue…
Continue reading this entry »
The history of New Zealand is speculation on farm land which stokes up debt, with disastrous consequences when the bubble bursts. The New Zealand industry is going through another one. During the Great War, farm land prices boomed. When farm product prices collapsed in 1920, farmers walked off their land. It was not that the…
Continue reading this entry »
World Sharemarkets Are Sneezing. What Does That Tell Us About the World Economy? Before discussing the state of the world economy – especially what is going on in China – it is useful to say something about the importance of the sharemarket (Americans call it ‘stock market’). It is far more important in pop-economics than…
Continue reading this entry »
The more one is certain about the state of an economy, the more one is likely to be wrong; the more one is certain about the state of an economy, the greater the media coverage. No wonder the public is confused. I shan’t add to the confusion. In quick summary, the New Zealand’s economic growth…
Continue reading this entry »
Also notes for Radio NZ Nights with Brian Crump: 11 August, 2014 The indications are that economic growth is slowing down from the boom rates of the last few years. The slowdown may turn into a contraction – that is, output may fall. There is a view that the contraction began in the middle of 2015. (It is…
Continue reading this entry »
Whatever the answer, what are we going to do about it? Steven Joyce, Minister of Economic Development and most other economic things, was hardly helpful when he dismissed talk of an economic recession on a recent TV3 The Nation on Saturday. Economists outside officialdom can guess what his officials were generally telling him. It probably…
Continue reading this entry »
Whatever the answer, what are we going to do about it? Steven Joyce, Minister of Economic Development and most other economic things, was hardly helpful when he dismissed talk of an economic recession on a recent TV3 The Nation on Saturday. Economists outside officialdom can guess what his officials were generally telling him. It probably…
Continue reading this entry »
We need to distinguish the sovereign state from the people it governs, and the other political institutions between. Things are moving so fast in the financial negotiations between Greece and the Troika (European Central Bank, European Union, International Monetary Fund) that there is little point in my trying to comment on them. But there is…
Continue reading this entry »