Archive for July 2008
RBNZ speech: Inflation targeting serves NZ well
Posted by: Matt Nolan on: July 31, 2008
As I said, I will discuss the RBNZ speech from yesterday.
Personally, I thought the speech was spot on – Dr Bollard understands the issues associated with inflation targeting, but he also more than understands the benefits.
Look at this statement surrounding oil prices shocks:
Instead, the key policy requirement in this situation is to allow the initial [...]
Agnitio on tour: Economic Musings from the US
Posted by: agnitio on: July 31, 2008
I’m currently in the US on business/visiting family and thought I might share with our kiwi readers back home some interesting things (from an economics perspective of course!) that I have come across in my travels. I’ll post any other random things I come across while in the land of the free.
A few things have [...]
Sorry, no conspiracy here
Posted by: cpworthington on: July 30, 2008
The Standard(*), No Right Turn(*), and Hard News(*) have all commented on a graph showing the declining share of labour compensation in national output over the period 1981-2002. The claim/implication is that right-wing policies have contributed to the drop in labour’s share, and that the Labour government’s policies have reversed that trend somewhat in [...]
Flexibility and inflation targeting – the RBNZ discussion
Posted by: Matt Nolan on: July 30, 2008
According to the Rates Blog, Dr Bollard will be doing a speech on “Flexibility and the Limits to Inflation Targeting”.
I am looking forward to the speech – it is an important issue, and Dr Bollard and the staff at the RBNZ definitely know what they are talking about.
Generally I have shown myself to be an [...]
A very inconvenient question
Posted by: Matt Nolan on: July 30, 2008
Over at Econlog they mention a uncomfortable question that is asked at Instapundit:
If somebody offered us our current income tax system for the first time, would we buy it?
Now when we have defended progressive taxes on this blog we have often assumed that it is a revealed preference for society – in fact this is [...]
The frogs challenge: Discuss imports
Posted by: Matt Nolan on: July 29, 2008
In a discussion on our trade balance frog blog states that mainstream economists won’t talk about the import side of the ledger. Now I’m a mainstream economist (I think I should put that on my business card ) so I decided that I should take up the challenge.
So lets have a look [...]
Government in perspective: What is the “other”?
Posted by: Matt Nolan on: July 29, 2008
When people look at government they often see a group of people that they feel are responsible for taking care of the country. Looking deeper, some people see a representation of society that is supposed to do what is in the social interest. Looking again we might see an organisation who is dominated [...]
Credit crisis comes to Australasia?
Posted by: Matt Nolan on: July 28, 2008
Following the freezing of Hanover finance’s finances we have heard that the National Australia Bank, and the Australia New Zealand Bank have both had to increase provisions for bad debt (NAB, ANZ).
These revelations put the relatively dovish stance of the RBA and the RBNZ in perspective – after all, central bankers are more than aware [...]
Reply: Climate change: the heresy of pragmatism
Posted by: Matt Nolan on: July 28, 2008
Idiot/Savant disputed our claim that market mechanisms are the best way to fight climate change on pragmatic grounds – namely stating that a regulatory solution that works would be better than a “market-based” solution that does nothing. Now I don’t disagree with this – however, I do think that I/S heavily mis-represented both our [...]
Gift or investment: Lil Wayne edition
Posted by: Matt Nolan on: July 25, 2008
Over at the excellent intersection between anthropology and economics blog, there is a discussion about the Lil Wayne, his latest album, and how this fits into the idea of a gift economy.
[Disclaimer: I haven't listened to Lil Wayne, so my knowledge on the marginal benefit of his music is severely limited.]
Here the question is [...]
July Mortgage rates: A question for our readers
Posted by: Matt Nolan on: July 25, 2008
Hi all,
Does anyone know why ASB cut mortgage rates following the OCR decision? Bank credit funding costs have been going through the roof – which is why the RBNZ felt that it needed to cut the OCR just to prevent large increases in mortgage rates!
I’ve heard that Kiwibank can cut rates because of the [...]
Price indicies: A discussion
Posted by: Matt Nolan on: July 25, 2008
Note: Other posts in this discussion are available under the tag “inflation debate“.
With the trade-off between inflation and other things behind us, and a justification for inflation targeting, we have a good base to discuss current activity and issues. The aim is to now discuss other methods of fighting inflation – however, before discussing [...]
July 2008 official cash rate cut: The long and winding road
Posted by: Matt Nolan on: July 24, 2008
So the Reserve Bank has cut interest rates.
If you normally read this blog you will know that this disappoints me – and I am grateful that both of you understand the pain I’m going through
There has been a lot of commentary on the Reserve Bank’s decision, which I will link to before moving [...]
July 08 OCR decision: Rates cut to 8.0%
Posted by: Matt Nolan on: July 24, 2008
So the Reserve Bank cut interest rates to 8.0%.
The only new information that has come out since June is a higher inflation outcome as a result of larger than expected increases in petrol and food prices. Furthermore recent increases in funding costs have helped to convince the Bank to cut.
Even ignoring inflation, it appears [...]
Womanomics and sunk costs
Posted by: Matt Nolan on: July 23, 2008
Cactus Kate states that men should pay the bill when taking a woman out – because of the substantial expenses associated with being a woman.
As an economist, I’m not so sure if this does it – after all, aren’t these all sunk costs, which implies that they shouldn’t have any impact on the final negotiation [...]
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