Greg Mankiw has an interesting post on what would make a good inflation target (ht CPW). According to work by Ricardo Reis and himself, aiming at the nominal wage is a good way of ensuring the highest degree of price stability – according to models calibrated to recent US data (paper here *). Using this […]
Over at The Standard they are discussing ‘triangular employment situations’ and a bill that is coming in to play that will give employees greater rights in these situations. Now that’s cool, I don’t have any issues with that. If I had to critique the bill I would run with the employee choice argument – if […]
The New Zealand governments biofuel regulation has just come back from select committee. The Hive makes the excellent point that some of the changes to the bill may breach WTO rules. However, my focus here will be on the biofuel regulations impact on prices. There has been a lot of talk about how mandatory biofuel […]
March quarter GDP numbers are out on Friday. Westpac has a good preview of the upcoming GDP numbers here. They, the Bank, and the market are picking a 0.3% fall in quarterly GDP over the March quarter. Remember, GDP=C+I+G+X-M (consumption + investment + government spending + exports – imports). We “know” that growth(X-M)<0 and growth(C)<0. […]
On his blog, Dr Mankiw titled a post “so much for Ricardian equivalence” after noticing that US retail recovered following the government rebates. This off the cuff statement comes from the fact that the government rebate also had no reduction in the long-term level of spending, and so “in theory” consumers will have saved all […]
As promised, I will now discuss Queen Bee’s fear that the Emissions trading scheme will limit our ability to take advantage of the wealth gains New Zealand will get from high food prices. First we should accept that there is a liability we have to pay. If anyone wants to comment saying we should just […]