Yeppie, we have been around for a year. It all started with this post from Rauparaha (although to be fair there was an introduction post along the lines of this one which got mysteriously deleted). Don’t have much to say other than that – hopefully the ramblings of a bunch of economists has been useful […]
Normally, when we hear that a supermarket is putting the screws on its suppliers it is a good thing for consumers. When supermarkets get better prices for wholesale products, some of those savings will be passed on to consumers! However, this case of squeezing the wholesaler does not appear as consumer friendly. Progressives are telling […]
Explain this to me. According to some New Zealand retail banks: If petrol prices increases, it will slow the economy, which will reduce inflationary pressures, and this will allow the Reserve Bank to cut interest rates. If the petrol price falls, imported costs are lower, which will reduce inflationary pressures, and this will allow the […]
Over the last three days the price of oil has fallen by nearly 10%. Given the sudden nature of this change it seems impractical to state that it is fundamental supply and demand factors driving the shift in prices. Tyler Cowen at Marginal Revolution states two reasons why we might get such significant changes to […]
Great article here: (ht Bayesian Heresy) http://blogs.ft.com/maverecon/2008/07/when-the-going-gets-tough-central-banks-hope-for-a-miracle/ Key points for me were about the “dual supply shock”: Don’t react to the relative price movement – react to it’s impact on inflation expectations, Recognise that this relative price movement implies a lower potential rate of output when looking at your output gap (*). I think we […]
Business and consumer confidence is at concerning low levels. Furthermore, there is now a general consensus that we are in a recession. However, something feels strange. A boost in petrol prices and a drought are the factors smashing our economy – the drought is temporary and people seem to be responding strongly to the change […]