Matt Nolan

Should New Zealand do anything in the face of global shocks?

/7 Comments/in /by

The data is changing so quickly that it gives me an intense sense of fatigue. As a result, I thought I would ask a question of our readers and rely on your cumulative intellect 🙂

Should New Zealand do anything in the face of what is primary shocks

This is a discussion type post, where I’d like you guys to tell me what you think. The aim is to “describe” the situation, and if (and what) policy could be appropriate. I will post a quick little ditty under the tab which can act as some sort of starting point I guess 🙂

BTW – even if you don’t have much to say here, say it anyway … please 😉

Read more

jamesz

Does sustainability make us happier?

/1 Comment/in , /by

So we are going to have to cut our consumption and it’s not going to make us better off. How come NewScientist’s authors seem to agree that we won’t necessarily be unhappier? Where evidence is given it tends to be in terms of happiness measures. Kate Soper (London Metropolitan University) points out that wealth doesn’t correlate with happiness over USD15,000 of income, while Andrew Simms (New Economics Foundation) makes much of the fact that people with vastly different living standards report the same level of happiness. The difficulty is that happiness isn’t the kind of measure that works for cross-country comparisons. Read more

Matt Nolan

Agreeing with Treasury or the Finance Minister?

/15 Comments/in /by

I am surprised to see Bill English slam his former department – of course it is entirely likely that the newspaper is simply exaggerating his reaction to their briefing.

The core of Bill English’s criticism of Treasury appears to be that “they aren’t thinking of ways that fiscal policy could prevent the recession”. But maybe they believe that it is not the role of fiscal policy to stabilise activity while monetary policy still has plenty of bullets left?

If that is the case then their focus on the “medium term” makes sense – doesn’t it. Well not quite.

Read more

Matt Nolan

And the Reserve Bank cuts …

/16 Comments/in /by

So, the Reserve Bank has just announced that it has cut by … I don’t know, its 7.30am for me so the Bank is yet to announce it. We have discussed this wildly though (here, here, and here) – so it will be good to see what has happened.

Feel free to do your own announcement in the comments (RBNZ site is here), and I will get to putting an update on this by about 9.20am.

Update: They cut by 150bp – I was wrong and everyone else was right 😉 . DG was right when he said Monday’s numbers were very important – the Bank was looking for a big cut but these numbers definitely set the tone for cuts to come. I am nervous about the size of the contraction in consumption that is being discussed – low petrol prices will get some people spending. But as long as no-one will lend to people I suppose it doesn’t matter 😉

Copyright tvhe.wordpress.com ©

jamesz

Will sustainability make us better off?

/6 Comments/in /by

An important question raised by the writers in NewScientist’s feature is whether we will be less happy living sustainably. This is the part of the series I felt was weakest. The general consensus amongst them is that we will actually be happier if we live sustainably because we will live healthier lifestyles. David Suzuki claims that ‘we would go out and walk around because there would be shops, musicians and people out on the street that we’d want to meet’. Kate Soper thinks we’d ‘…enjoy healthier modes of transport such as walking, cycling and boating’.

The authors appear to be projecting their own lifestyle preferences onto others here. It is this element of the environmental rhetoric that bothers me most: the idea that we would all be happier people if only we were more like them because they know what’s best for us better than we do. Read more

Matt Nolan

RBA cuts 100

/2 Comments/in , /by

The Reserve Bank of Australia cut 100 basis points last night taking the cash rate to 4.25% – well into easing territory.

A feeling that global commodity prices were in for a sustained lower period was a driving force behind this stimulus.  Surprisingly the Reserve Bank of Australia did not mention to enormous decline in fuel prices – however, there suggestion that the terms of trade would fall markedly implicitly suggests that the decline in petrol prices will be dominated by other factors.

What does this mean for New Zealand – a rule of thumb stemming from cuts so far (Aussie cut + 25) would suggest 125bp.  100 is still conceivable, as is 150.  My pick of 75 now seems incredibly unlikely.  Note, further discussion of the decision occurs in the comments of this post 🙂

Copyright tvhe.wordpress.com ©