Archive for June 2008
The value of endowment
Posted by: rauparaha on: June 30, 2008
Well, we don’t run a requests service, but never let it be said that we don’t try to give our readers what they want (or what we want them to want, anyway). The Standard asks us to have a chat about this piece in The Economist which discusses endowment effects, so here goes.
The first question [...]
The Economist’s Inflation expectations primer
Posted by: Matt Nolan on: June 30, 2008
The Economist has an excellent piece on inflation expectations (*) (ht Anti-dismal and the Economist blog). In it they mention some of the difficulties of using the inflation expectation measures as a gauge of inflation, namely:
The problem with survey measures: Consumer often mis-interpret inflation, and take increases in the price of certain goods [...]
New Zealand March 08 GDP
Posted by: Matt Nolan on: June 27, 2008
So the economy shrank 0.3% over the March quarter (or 0.6% if you buy the expenditure measure instead) – the appropriate tables are here (*).
This was bang on expectations. The stock boost we talked about was there, but everything else was sufficiently bad that it landed on expectations anyway
What concerned me was [...]
Should we thank god for our farmers?
Posted by: Matt Nolan on: June 26, 2008
In an interesting move, Federated Farmers president Charlie Pedersen stated that we should “thank god for the (food) producers” (*) in New Zealand, for providing us with food and/or wealth. Now I have to admit, I find this attitude a bit ridiculous.
Don’t get me wrong, agricultural products do create a lot of wealth, hell meat [...]
Are New Zealand’s inflationary pressures contained: The nominal wage evidence
Posted by: Matt Nolan on: June 25, 2008
Greg Mankiw has an interesting post on what would make a good inflation target (ht CPW). According to work by Ricardo Reis and himself, aiming at the nominal wage is a good way of ensuring the highest degree of price stability – according to models calibrated to recent US data (paper here *).
Using this [...]
The surplus value of labour
Posted by: Matt Nolan on: June 24, 2008
Over at The Standard they are discussing ‘triangular employment situations’ and a bill that is coming in to play that will give employees greater rights in these situations. Now that’s cool, I don’t have any issues with that. If I had to critique the bill I would run with the employee choice argument [...]
Biofuel regulation and price
Posted by: Matt Nolan on: June 24, 2008
The New Zealand governments biofuel regulation has just come back from select committee. The Hive makes the excellent point that some of the changes to the bill may breach WTO rules. However, my focus here will be on the biofuel regulations impact on prices.
There has been a lot of talk about how mandatory [...]
GDP preview March 2008
Posted by: Matt Nolan on: June 23, 2008
March quarter GDP numbers are out on Friday. Westpac has a good preview of the upcoming GDP numbers here. They, the Bank, and the market are picking a 0.3% fall in quarterly GDP over the March quarter.
Remember, GDP=C+I+G+X-M (consumption + investment + government spending + exports – imports). We “know” that growth(X-M)<0 [...]
In defense of Ricardian equivalence – sort of
Posted by: Matt Nolan on: June 23, 2008
On his blog, Dr Mankiw titled a post “so much for Ricardian equivalence” after noticing that US retail recovered following the government rebates. This off the cuff statement comes from the fact that the government rebate also had no reduction in the long-term level of spending, and so “in theory” consumers will have saved [...]
Discussion on how to screw up a terms of trade increase II
Posted by: Matt Nolan on: June 20, 2008
As promised, I will now discuss Queen Bee’s fear that the Emissions trading scheme will limit our ability to take advantage of the wealth gains New Zealand will get from high food prices.
First we should accept that there is a liability we have to pay. If anyone wants to comment saying we should just [...]
Discussion on how to screw up a terms of trade increase
Posted by: Matt Nolan on: June 20, 2008
According to Statistics New Zealand our terms of trade is now at its highest point in almost three and a half decades. To some degree this lift appears to be structural, with growing demand for protein goods from Asia and the increasing prevalence of biofuels two of the main factors driving up prices permanently.
However, [...]
A technical recession in New Zealand: What’s the big deal?
Posted by: Matt Nolan on: June 19, 2008
Since the March quarter retail numbers have been released it has been apparent that New Zealand was heading down the road of a technical recession (two quarters of negative economic growth – seasonally adjusted). This has led the countries finance minister to once again admit that a technical recession is likely – (something he admittedly [...]
Liquor ban: Is there a rational
Posted by: Matt Nolan on: June 18, 2008
After reading this excellent post on the liquor store regulation idea on Kiwiblog (which aggregates the thinking of a number of other blog authors posts on the issue are found *,*,*,*), I’ve decided to do a little thinking out loud about the issue.
Now, to analyse what it going on we have to ask why we [...]
The overestimation of Pigovian taxes
Posted by: Matt Nolan on: June 18, 2008
Over at Anti-dismal Paul Walker points at a paper on Pigovian taxes by John VC Nye from George Mason university. In this paper Dr Nye makes the following point:
A claim about the optimal Pigou tax is a joint claim about the size of the externality and about the optimality of observed outcomes, not just [...]
The value of value
Posted by: Matt Nolan on: June 17, 2008
One of the major questions I face when discussing economics is:
Why do we feel that prices are the appropriate measure for illustrating the value someone receives from a product?
Now I only have a limited understanding of welfare economics, but I am going to attempt to discuss the issue anyway . If anyone [...]
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