Category Archives: macroeconomics

New Zealand’s internal inflation is not benign

New Zealand’s internal inflation from non-tradables is well alight at 2.8 percent for the last year. In contrast, prices for items traded internationally declined by 0.3%.  Understanding these differences and the reasons for these differences lies at the heart of … Continue reading

Posted in macroeconomics, Uncategorized | 3 Comments

House-price inflation and interest rates are bound at the hip

Reducing house-price inflation depends on identifying the drivers. Right now, that means interest rate policy and quantitative easing must change. Everything else is band-aid as the fireball grows House-price inflation is New Zealand’s hot-fire issue. Look back a year and … Continue reading

Posted in macroeconomics, The economy, Uncategorized | 15 Comments

Reserve Bank drives economic policy

The Reserve Bank drives economic policy with officials, rather than elected Government, in the driver’s seat. But the Reserve Bank mandate provided by the Government is where it all starts There are two key institutions that drive New Zealand’s economic … Continue reading

Posted in macroeconomics, Uncategorized | 7 Comments

A resource-based perspective on immigration

Any debate on immigration has to consider the fixed natural resources that have to be spread across increasing numbers of citizens A recent article by Professor Spoonley at interest.co.nz  has laid out the demographic aspects of immigration. Spoonley illustrates how … Continue reading

Posted in macroeconomics, The economy, Uncategorized | 3 Comments

Can low interest rates really stimulate the economy?

Quantitative easing is surely driving down interest rates and in time will most likely lead to inflation. Whether this will stimulate the economy is much more problematic The current policy of the Reserve Bank is very clear.  It is to … Continue reading

Posted in macroeconomics | 7 Comments

Quantitative easing floods capital markets

The New Zealand Government is driving interest rates down through massive quantitative easing. That means they are creating lots of additional money. Capital markets are consequently flooded with available money looking for a home. A debate is needed as to … Continue reading

Posted in macroeconomics | 7 Comments