Top 10: What has been happening in NZ?
I have spent most of the last four years trapped in a small space, pouring over legislation and microdata to figure out details of the New Zealand tax-transfer system prior to 2014 – with short breaks to deliver some lectures at Victoria University. I learnt a lot, but I had no chance to keep up with the New Zealand economy.
So now I’m back, and I have questions. This is what I bring up in my Top 10 over at interest.co.nz that went up this weekend.
So what are the key issues I’m struggling with:
- Why is the participation rate so high – this helps to describe it, but why? [Related facts: It has been full time work climbing, with increasing participation by those over 65 AND rising female participation]
- Why has the NIIP liability position improved to the degree it has – this helps to describe it, but why?
- How are we seeing “late cycle” without input price pressures? [Note: The RBNZ does not see this as late-cycle judging by this]
- The OCR looks low for “late cycle” – what is this due to? I’m going to split this in two: What part is due to real economy issues, and what part is due to changes in bank regulation/macroprudential policy?
Related questions – which are likely answered by the answers to the questions above are:
- Why is labour productivity so low?
- Why is the part-time employment as a percentage of employment so low?
- Why are house prices so high?
- Why is there no product price pressure – especially non-tradable prices? This describes some – but why are non-tradables doing this now?
- Why is the terms of trade rising to the degree it is?
As you can tell reading this, I genuinely don’t know anything … but as someone who has a pretty clear view on macroeconomics and a good grasp on the NZ data and data history prior to 2014, I haven’t found any accessible answers to these questions easily. So I am hoping you can help me here 😀