TVHE is a bunch of current and former Wellingtonians so, via The Wellingtonista, here is a map of how we voted down here.
Tom at The Wellingtonista has done an amazing job with the data so click the map to see a detailed breakdown by polling booth. Read more
This semi-annual report by the RBNZ will take on disproportionate importance given recent events.
It came out yesturday, so what happened? Is our financial system doing alright? What do they think are the primary risks? What do they say about the deposit insurance scheme!?
So the September quarter retail figures are out.
I love the quarterly figures because they give us volume and price data as well as the monthly value data.
So how much did retail sales fall by – only a little bit hopefully. Now pull out all those automotive subtypes – how much did core volumes fall by – this is the key figure for me. If they fell by more than, say, 0.6% in the quarter (seasonally adjusted) then I would be concerned.
How about the “deflator” (retail price increases). People in the retail industry say that they are slashing prices to get people in the door – the consumer price index indicated that they weren’t actually doing this. So which is it?
Now we can use the value number for something useful – compare it to growth in hours worked X average hours in the QES (on the third). If the QES number grew by more then it indicates that we may be seeing a sizable increase in savings – some may view this as “demand deficiency” and other may view this as “a required adjustment”. Ultimately, where I sit depends on how big the adjustment is 🙂
So, discuss 😀
After todays attack on effective “left-wing” politics of blanket transfers and the idea that we need government to save the day, I thought I should come out with a post in favour of other general government action. So lets looks at progressive taxes.
It is common for economists to attack progressive taxation as it can be seen as:
However, there are reasons why society may want a progressive tax system, and when it would dominate other tax systems:
Read more
The paradox of thrift is one of the key lessons taught to macroeconomics students during their first undergraduate year.
Fundamentally it states that if everyone in society decides to save more right now, then it reduces consumption, with reduces economic activity and thereby incomes – and as a result it may actually decrease aggregate savings, and it will definitely reduce economic activity.
It is still widely applied, with recent Nobel prize winner Paul Krugman appealing to it in order to explain why the US needs to jump on in and get consumers spending again.
Of course this does not mean the theory is necessarily right. The paradox of thrift does not have a supply side – as long as prices and quantities can adjust to an economic shock this paradox, and the suggestion of government intervention in the face of it, does not hold water. For government intervention to be a possible solution we need a MARKET FAILURE, a market failure that causes a special macro-economic situation called “demand deficiency”. (Note: This is effectively the difference between Say and Keynes).
Federated Farmers’ press release:
…if government increase[s] infrastructure expenditure it should spend money on building dams rather than cycle lanes. …Water storage is critical to New Zealand’s future. It is well known that farming is the backbone of the economy. Current run of river water allocation systems see farmers too vulnerable to drought and floods.
The government’s State of the Environment report 2007:
The increase in total water allocation in New Zealand between 1999 and 2006 can largely be explained by the increase in demand for irrigation. The amount of consented irrigated land in New Zealand increased by 52 per cent over this period…
Water is getting scarcer and scarcer worldwide and it’s only a matter of time before NZ feels the pinch, too. Farmers say they should get the water becasue they’re our ‘backbone’; environmentalists throw up their arms in dismay; the government implements ad hoc water restrictions and gets lobbied by everyone.
Luckily, economics provides a solution to the problem: Read more