Before the stream of articles come out saying: Wage growth was 2%pa Wage growth was less than inflation Let’s just say that Stat’s got the title wrong on this in strict terms. “Productivity adjusted” wages rose 2.0% … the LCI is a quality adjusted measure, just like the PPI, and the CGPI – it is […]
Rising and volatile oil prices suggest that oil scarcity is a important issue. So what can be done? Personally, I think nothing – the price represents scarcity, and unless we think there are asymmetric information issues regarding the stock of fuel then this is fine. If we do believe these issues exist, then since fuel […]
After negotiating a sizable haircut on Greek debt and pushing through an expansion in the EFSF we have seen markets rally. The current crisis has very much been one of people wondering “who the hell will bear the burden of default”. The closer we get to solving that question, the closer we get to putting […]
I was browsing the Herald to keep abreast of national events when I ran into this new set of policies from Labour. I saw they wanted to gradually increase the retirement age, and I was thinking “this is good stuff”. Then I saw that they have absolutely no moral fibre and have decided to package […]
I see there are further calls for NZ to look at its “dollar policy”. I do not believe that an investigation will sensibly suggest we should change much in terms of “direct” policy – and I think it is important to try and understand what is going on here before saying we shoudl control anything. […]
A pet hate of mine is that we use CPI to discuss inflation – without recognising the pitfalls. My solution would be to make a real inflation measure, which is something the dynamic factor model at the RBNZ is trying to do. I discuss this reasoning in more detail in an article for Idealog here.