The jump in unemployment, and the fact that the labour market has been weak for a long time, is leading to understandable angst. The government has been blamed as you often expect, the world has been blamed as it should, and the RBNZ is increasingly being blamed. I would like to cover off a few […]
On Breakfast this morning I heard the presenters querying why house price growth is so strong (5.7%pa in October) while unemployment is at a 13 year high (7.3% in September). What is especially perplexing is that the house price growth is primarily in Auckland (with Canterbury also important – but this is due to the […]
Ever since the Lucas Critique forced economists to recognise that we could not use data for policy in a purely theory free way, the concept of expectations, and how expectations are formed has become important. The growing interest in behavioural and neuroeconomics are all in part a response to this realisation, and a clearer understanding […]
In a recent post, Mark Calabria from the Cato Institute took aim at the idea that the Lehman Brothers crisis was the “trigger” for a big crisis. Now I do not disagree that there was, and would have been, a recession without Lehman Brothers – and even without the uncertainty caused by the lack of […]
I’m a little perplexed to see Gareth Morgan come out railing against the Productivity Commission’s report on the housing market. Now when it was released, I thought the focus and justification were a bit funky – but that the analysis seemed largely sound. Gareth’s posts have been found here and here. He says that supply is […]
In a recent column Bernard Hickey suggested the following: Taxpayers still face the risk of seeing bank losses socialised in future while today’s profits are privatised. A more honest solution would be for the Government and the Reserve Bank to openly state that a bailout would not occur. Term depositers would demand a higher return […]