It has long been accepted as fact that NewZealand is an outlier in terms of its large stock of global liabilities andthat this position is a big risk for the economy. However, after four years ofnear constant revisions to the data, does this belief still hold up toscrutiny?
Statistics NZ recently released triennialinformation on spending by households in the June 2013 year. By using thesefigures we can get an idea about how household spending has changed since theGlobal Financial Crisis.
Although a sharp rebound in growth in NewZealand looks assured, one significant downside risk remains – a sizableslowdown in Asia. In this article we discuss some of the capital marketpressures in Asia over recent months, what could go wrong, and why we don’tthink events in Asia will derail growth in New Zealand.
Durable good spending has been increasing strongly over thepast year, which is a good sign given that this type of expenditure usuallyleads the economic cycle. How much further does the lift in durable consumergood expenditure have to run, and what effect may the new loan-to-value limitson mortgages have on this form of spending?
Net migration has surged well above the outlook we providedin our July forecasts, and looks set to keep outperforming over the comingyears.
Policy changes in China are expected to have a broad impacton growth patterns around South Asia. In this article, we investigate what isgoing on, what it means for South Asian economies, and discuss the ways in which New Zealand is different.
Recently, I have seen more and more writers rail against gross domestic product (GDP), saying that we need clearer indicators and output targets to set policy with. On one level this is true, GDP is overused and abused. However, these writers are really falling into the same trap as those who excessively obsess themselves with GDP statistics – they are overly focused on specific outcomes, and are ignoring the trade-offs associated with their choices.
It appears we’ve all survived another daylight savings event. We’re all a little bit more tired, but we now get the advantage of having plenty of early evening sun. While many of us do appreciate this, I plan to discuss the economic argument for why we use daylight savings – and what this means for a broad range of other issues that involve government.
New Zealand is a small country. As the Global Financial Crisis has shown, the whims, fancies, and mistakes of the large economies in our globalised world have a significant impact on New Zealand. However, as New Zealand has outperformed most of the world over recent years, and looks set to keep outperforming, I have learnt that it can be good to be small!
After a long period discussing tax, we are now up to thevery last tax article! The last type of taxation we are going to discuss isinflation tax. Now to do this we cannot just say "inflation is bad". Intruth, we need to ask how policy actions related to inflation and monetarypolicy can function as a tax, and why (as a result) economists often tend tosteer away from forms of inflation taxation and direct money financing ofdeficits when discussing optimal tax policies.