According to Statistics New Zealand our terms of trade is now at its highest point in almost three and a half decades. To some degree this lift appears to be structural, with growing demand for protein goods from Asia and the increasing prevalence of biofuels two of the main factors driving up prices permanently. However, […]
Since the March quarter retail numbers have been released it has been apparent that New Zealand was heading down the road of a technical recession (two quarters of negative economic growth – seasonally adjusted). This has led the countries finance minister to once again admit that a technical recession is likely – (something he admittedly […]
After reading this excellent post on the liquor store regulation idea on Kiwiblog (which aggregates the thinking of a number of other blog authors posts on the issue are found ,,,), I’ve decided to do a little thinking out loud about the issue. Now, to analyse what it going on we have to ask why […]
Over at Anti-dismal Paul Walker points at a paper on Pigovian taxes by John VC Nye from George Mason university. In this paper Dr Nye makes the following point: A claim about the optimal Pigou tax is a joint claim about the size of the externality and about the optimality of observed outcomes, not just […]
One of the major questions I face when discussing economics is: Why do we feel that prices are the appropriate measure for illustrating the value someone receives from a product? Now I only have a limited understanding of welfare economics, but I am going to attempt to discuss the issue anyway 😉 . If anyone […]
Article from Dom Post on Saturday is here (*). Other New Zealanders discussing inflation targeting can be found here (*) and here (*). In order to make justify the defense of inflation targeting let me note down a few points about why inflation targeting is used and how it should work.