Yesterday the Australian’s left their official cash rate unchanged at 7.25%, 100 basis points lower than our cash rate. The rate has been on hold since March, but the overall feeling is that the bias is still towards further tightening – especially with the inflation rate at 4.2%. However, the evolution of the statement between […]
So its official – our government has repurchased the rail network (blog commentary here, here, and here). Now such a purchase only makes sense if there are positive externalities from rail that the market was not accounting for (or if the horizon of the company was too short-term, but I don’t get that feeling). These […]
What is a discount factor? A discount factor tells us the rate of time preferences between periods of time – in other words it gives us a measure for how much “stuff” we are willing to sacrifice in the future in order to consumer now. Economists often use “exponential discounting“. Furthermore Rauparaha has discussed how […]
Yesterday when discussing why supermarkets may discount Nurofen during cold season I put to the side the possibility that it was the result of a collapse in tacit collusion between Nurofen providers. My reason for ignoring this explanation was purely selfish – I was tired and that explanation required more thought than I had capacity […]
When I was at the supermarket I grabbed some Nurofen for my partner who has a head cold. I seemed to be in luck when I was at the supermarket as there was a half-price special on Nurofen – how convenient. Then I realised that almost everyone I knew had a cold, and most of […]
Today the US Federal Reserve cut their cash rate by 25 basis points to 2%. At the same time data was released stating that GDP growth in the US was 0.6% (annualised, seasonally adjusted) in March – a weak number to be sure, but positive and higher than market expectations. The first thing to take […]