2024-04-21 20:00
Cross-post from Substack.
Look I’m from New Zealand – so when everyone around me started talking about ATARs I just smiled and nodded.
In fact I probably couldn’t tal… Read More
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A blog on economics, with a focus on New Zealand issues.
2024-03-12 19:00
Cross-post from Substack.
COVID was a pretty big life shock for all of us – with uncertainty about the virus, and the magnitude of government interventions associated with it, leadi… Read More
2024-02-20 19:00
Cross post from Substack
I keep receiving emails that Star Wars Squadron is only $2.50. Wild! I love Star Wars, and when I was a kid I loved flying around all the planes and stuff.
But… Read More
2024-01-23 20:00
Cross posted on Substack.
At the close of 2022, Gulnara and I thought it would be fun to pop up some forecasts for 2023. So what were they and how did we do?
The forecasts
It appear… Read More
2023-12-25 20:36
Cross post from Substack.
It’s Boxing Day – and I’ve already used up the idea of discussing the now largely missing Boxing Day sales. And the idea that Boxing Day is inc… Read More
2023-12-20 23:14
Cross-posted from substack.
I’ve been seeing a lot of the following around the place:
US banks have almost $700 billion of unrealized losses on the securities they hold.And sinc… Read More
2023-12-18 20:00
Cross posted from Substack.
A few years ago Gulnara and I made a video on unemployment. Although this was a particularly unpopular video, it was actually one of our favourites – and… Read More
2023-12-11 19:30
Cross posted from Substack.
Previously we’ve talked about the cost of job loss in terms of revealed consumption responses – i.e. how do individuals cut their spending followin… Read More
2023-05-18 21:00
Yesterday the New Zealand Budget was released and described as “surprisingly frilly” for a no-frills Budget. As a result, is it inflationary?
My answer is “no idea&rdqu&hell…Read More
2023-05-17 21:30
A common refrain when talking about unemployment benefits is the Iron Triangle of Welfare.
If we are only going to spend a fixed amount on welfare payments, then there is a trade-off bet… Read More
2023-05-09 22:43
Last night was the Australian 2023/24 Budget. Like all Budgets it existed and was filled with politics – but I was surprised to find my twitter filled this morning with people calling… Read More
2023-05-03 22:00
In the last blog post I noted that there were rumors of a higher benefit rate for those over 55. Since then we’ve been thrown into an information vacuum in Australia, as noted here by… Read More
2023-05-01 23:00
Last week we’d been chatting about the unemployment benefit in Australia and the reasons why some unemployed people don’t get it, while some people who aren’t unemployed do… Read More
2023-04-30 21:00
I’ve now read the IRD and Treasury effective tax rate reports, and they’re good. I’ll read them a few more times before writing anything on them in a couple of weeks &ndas&hell…Read More
2023-04-26 21:00
I just spotted in the news that the New Zealand IRD and Treasury “effective tax rate” reports have been released. The IRD report is here and the Treasury report is here. I also… Read More
2023-04-25 23:00
After yesterday’s pitch and related tweet thread, I was keen to dig a bit more into elements of the first note from this release – Income Support Gaps: When JobSeekers don’… Read More
2023-04-24 21:17
Over night the e61 Institute released some work that I’ve been involved in (with a bunch of amazing economists) chatting about the JobSeeker payment in Australia. Let’s have a… Read More
2022-04-20 21:06
Hey all, just a reminder that submissions are currently open on quite a major policy change – the introduction of large scale fully funded income insurance in New Zealand. So if you h… Read More
2022-04-13 20:39
The RBNZ increased the OCR by 50 basis points to 1.5% – to someone from three years ago that level might not sound strange, but just take a look at this 10 year government bond rate tr… Read More
2022-04-01 19:30
Robert MacCulloch has written an interesting piece on economic advice within the public service in New Zealand (free link), with Eric Crampton noting a lack of trained economists in governme… Read More
2022-03-27 19:30
One of the founding authors and editors of TVHE has a couple of cool anti-trust articles up for the Anti-Trust writing awards. I reckon we should go an give them some support. Will Taylor… Read More
2022-03-23 20:00
Over two days Betsey Stevenson had two posts on the nature of work – both of which I agree with, and both of which sound like they may contradict.
I frequently hear highly compensa… Read More
2022-03-21 19:30
With prices rising an increasing number of people are looking for a scapegoat. Fairly “obviously” the blame should be on those who are increasing prices – namely firms. Th… Read More
2022-03-16 20:00
In a recent article on interest.co.nz I chatted about monetary policy in New Zealand. As we’ve noted in the past, measures of price growth are pretty elevated in New Zealand – h… Read More
2022-03-14 19:30
Ok, I’m coming permanently out of “proper blogging” retirement. Why?
The New Zealand government has decided to cut fuel taxes and RUC due to the “cost of living cr… Read More
2022-02-13 23:19
Happy Valentine’s Day everyone, from Gulnara and myself. To celebrate we’ve put up a video characterising two different ways of thinking about gift giving – specifically t… Read More
2022-02-08 19:30
Walking down the street everyone is abuzz with the recent CPI numbers. 5.9% inflation! Someone’s failed! Economists are wrong for some reason! Freeze prices! Slash things! Destro… Read More
2022-01-31 19:30
Seeing the price of haircuts rise, even relative to other things I might spend my money on, is the sort of thing to make an economist rail about anti-competitive behaviour. But is that real… Read More
2022-01-29 20:03
In a recent video Gulnara gave us some background of haggling in the former Soviet Union, and we tried to understand some of the way we could evaluate whether it is “good or bad”… Read More
2022-01-19 19:00
In a recent video we’ve chatted about why cold and flu medication may be cheaper in winter than in summer – something that may seem a bit counter-intuitive. This was an issue di… Read More
2022-01-09 20:00
As part of our “Data and aggregates” playlist for macroeconomics we’ve added a video on GDP as income, and how to think about other national accounts measures in terms of i… Read More
2022-01-03 22:35
Note – this was going to be a video, but the day after writing it up I already saw better posts on it here and here and also here. However, the text I wrote is kept below as it a… Read More
2021-12-28 22:05
Hi all – below is the text version of our book review of Thomas Piketty’s “Time for Socialism“. The video can be found here. Would be keen for thoughts, and if ther… Read More
2021-06-29 20:00
Hey team,
I realised that a lot of the videos going up presuppose knowledge about what GDP is and what the purpose of GDP is – but after hearing another series of people baselessly… Read More
2021-06-22 20:00
Today’s video is on Okun’s leaky bucket – a metaphor that is used to describe how we would think about a trade-off between transfer resources and the total number of resou… Read More
2021-06-15 20:19
I’ve just popped up a video where I am to explain what “capital” is, in terms of a factor of production in an economic sense, in under 10 minutes.
The goal was to work o… Read More
2021-06-10 20:00
This week Matt and me followed around a lawnmower man to figure out what productivity and unemployment are – and how we would think about measuring them. Feel free to give these video… Read More
2021-06-01 05:00
In this video I outline the structure for thinking about economic growth – and point out how much of society’s progress has been due to our knowledge, organisation, and specialis… Read More
2021-05-29 22:14
Hi all,
I’ve finished lecturing for the year early and so Gulnara and me have decided to put up some videos on measuring GDP and inequality.
We’ve both been quite keen to p… Read More
2020-12-17 20:35
It has been a long time since I’ve closely followed New Zealand macroeconomic statistics – but I was a bit surprised seeing the headline “GDP jump of 14 per cent completes… Read More
2020-10-01 19:00
The RBNZ released a report estimating the economic impact of COVID-19 containment measures back in May. They estimate that one week of alert level four (L4) costs the economy about $2.2 bill… Read More
2020-08-16 20:00
Now that we are back to level 2 lockdown in New Zealand (apart from Auckland where it is level 3) the issue of “should we wear a mask” has cropped up.
A lot of “words&rd&hell…Read More
2020-08-12 20:00
Last time I discussed how the cash rate influenced the interest rate. But what happens when the cash rate goes negative? This is the focus of today’s post.
After recent… Read More
2020-08-12 19:21
As noted on blackboard we will need to decide if we continue with these lectures, or move to prerecorded lectures and no in person component . As a result I have popped a vote for… Read More
2020-08-10 20:00
I have just bumped into an interesting twitter thread where an MMT theorist justifies their job guarantee by pointing to the Soveit Union’s Parasite law.
intellectual leader… Read More
2020-08-05 20:00
Hi ECON141 students. Unlike ECON130 there isn’t weekly material on this site, with lecture notes being provided instead. However, I will add the occasional piece to help gi… Read More
2020-08-03 20:00
The recent data from the Big Mac index indicated that, in New Zealand a Big Mac costs $6.60 NZD. However, in the United States it costs $5.71 USD. As Stuff.co.nz notes this impli… Read More
2020-07-27 20:00
The latest speech by the RBA’s Governor Philip Lowe, they have ruled out negative interest rates as an alternative monetary policy option for Australia in the near future.
In the d… Read More
2020-06-22 20:00
Today I am going to discuss the relationship between the gender pay gap and wage stickiness.
Wages are termed sticky when they don’t adjust to the optimal level driven by the change… Read More
2020-06-16 20:00
Over the past few weeks I’ve been working mostly from home as part of the COVID lockdown. However, now with the move back to Level One I’m heading back into the office on a… Read More
2020-06-14 20:00
In the first six weeks we described models of individual and firm choice, and given many individuals and many firms we were able to describe a competitive market.
In doing so we found tha… Read More
2020-06-08 20:00
In this post I am going to talk about price rigidities/stickiness. What do economists mean about price rigidities and how do we test them?
On the face of it this sounds… Read More
2020-06-02 20:00
This week was a topic that a lot of students take the course for – finance.
Finance seems like an exciting topic, with a lot of the economic metrics we see flashed around day to day… Read More
2020-06-01 20:23
Negative interest rates are in the news. In response to imploding economies and very low inflation rates, some commentators have argued that central banks should cut nominal interest rates b… Read More
2020-05-27 19:59
One week, two big topics! Today we’re discussing Game Theory.
This topic is awesome, and really wish we could give it more space – in future economics you will.
So what ar… Read More
2020-05-26 20:00
Hi all,
As you know this is a course on microeconomics … so it is a bit random to teach macroeconomics. However, as this is the only economics course many students do we think it… Read More
2020-05-19 20:54
This weeks discussion is something a bit different. For the first six weeks we were building up models of producer and consumer choice, and finished with our market model of “perfect… Read More
2020-05-13 20:00
New Zealand banks noticed an increase in cash withdrawals by households since the day of lockdown announcement. Banks believe this might be due to the panic stockpiling of nervous households… Read More
2020-05-12 20:00
Hi all. As you will have noticed from the lecture videos there is a lot of content in this week – more than in any other single week. But it is because we are tying all the prior wee… Read More
2020-05-12 02:58
I have been preparing my lecture content for macroeconomics later in the year, and have thought it would be a bit of fun to finish with the following: discuss why the initial marginal propen… Read More
2020-05-05 20:00
Today is a short post – there is just a key thing I want you to remember about a profit maximising firm. [Lecturer slides here and here]
Marginal Revenue = Marginal Cost
Marginal… Read More
2020-05-03 20:00
Inflation went up to 2.5% in the March quarter, its highest rate since 2011. This was a fair amount above expectations, with the RBNZ expecting a 2.2% rate. They were not alone with private… Read More
2020-04-28 20:00
Hi everyone.
My apologies that we can’t meet in person anymore – as the university is now running classes online due to the COVID-19 quarantine. You will have seen that the l… Read More
2020-04-20 20:00
I have been hearing anecdotes from my friends in Europe that prices in supermarkets have increased since the last couple of months. Interested I had a look online and found a number of artic… Read More
2020-04-13 20:00
Greetings reader from 2120, I see that you are trying to work out what the economic consequences of the unfolding pandemic in your time will be – and so are looking up information on t… Read More
2020-04-07 20:00
The pandemic confined the vast majority of us to work from home during the quarantine period. However, there are certain types of occupations such as masseuse and hairdresser that can not be… Read More
2020-04-01 19:00
In my last post I noted that the “supply or demand shock” framing for COVID-19 could be useful, but hid important elements – namely even when there is a real shock if we ar… Read More
2020-04-01 00:34
Gulnara keeps telling me that she needs to go shopping – but of course there is a nationwide quarantine so she’s stuck at home listening to me.
Although I feel some sympathy w… Read More
2020-03-30 19:00
The events of the last two months have brought financial liquidity issues into sharp focus. As firms shut down for an indefinite period in response to the Coronavirus, the question on many p… Read More
2020-03-25 19:00
In this post I want to have a bit of a brainstorm around the real shock we are facing with COVID-19 in the country. The key idea I wanted to think about was what type of shock this is &ndash&hell…Read More
2020-03-22 19:00
For the last 8 months I have been teaching at a small liberal arts college in Morocco, Al Akhawayn University. It is located 1600m high in a small town in the Atlas Mountains, about 60… Read More
2020-03-19 19:00
As a way of thinking through the material in the last three weeks of class (Week One, Two, and Three) I’d be keen for you to watch a video from the Primer Youtube channel. Note: I pre… Read More
2020-03-18 19:00
With COVID-19 causing concerns, the RBNZ announced to cut the official cash rate to 0.25% on 16 March. Given this the OCR is at a low level now- leading to open consideration of other… Read More
2020-03-17 19:00
Hello all!
Last week you learned about indifference curves and budget constraints, and how we could use these concepts to understand individual choice. In the end we were able to build a… Read More
2020-03-16 19:00
Business cycles, the phases of expansion and recession in an economy, are a durable feature of macroeconomic data. Typically, quarterly real GDP data is used to determine the phase of the bu… Read More
2020-03-15 19:00
With the pandemic news moving quickly Matty convinced me to spend more time on Twitter to keep up with the news (my account is here if you want to follow). I saw some interesting links rega… Read More
2020-03-12 19:00
Toilet paper has been running out all around the world, with Australian’s genuinely fighting over it in supermarkets – and there has been a big show about it in the news.
This… Read More
2020-03-11 19:00
There is a lot of talk about a 50bp cut by the RBNZ in a couple of weeks due to COVID-19. But what does this mean, and why are we cutting interest rates to battle a bad flu?  &hell…Read More
2020-03-10 19:00
Hello again everyone.
This week a different lecture is coming in to discuss economics with you – he’s great and you are all going to have a wonderful time.
I cannot link… Read More
2020-03-08 19:00
Yesterday in New Zealand (and today, the 8th of March, around much of the world) it is International Womens Day.
I was brought up in the Soviet Union, and so this is a day that was always… Read More
2020-03-04 19:00
It is a pity that the World Bank’s Chief Economist Penny Goldberg has resigned after being in a role for only 15 months. Her resignation appears linked to the scandal around the financ… Read More
2020-03-02 21:45
Hi everyone – welcome to what will become a (regular) Wednesday post, even thought today is Tuesday.
To the students reading this, welcome to VUW’s ECON 130. The purpose of t… Read More
2020-02-26 19:00
I was recently asked to explain the money-shot result from my PhD in a more accessible way – and I thought I’d share that here, just to get some feedback regarding whether the wo… Read More
2020-02-24 19:00
There are many forecasts of how well, or otherwise, our economy will do over the next year. However, as a rule these forecasts are not very good at providing a candid account of the uncertai… Read More
2020-02-20 19:00
The coronavirus (COVID-19) that is spreading through China is a tragedy, and I’d like to send my best wishes to those that are sick and my love to those who have passed on.
However… Read More
2020-02-19 19:00
From Twitter, but originally the Samuelson and Nordhaus text – based on a phrase from Alfred Marshall – is beautiful:
This article reminds me of the book Economics by Samuels… Read More
2020-02-17 19:00
As many of you know, I have done a lot of work on New Zealand’s retirement and tax systems in the last decade. I have been attracted to this issue because New Zealand has tax and… Read More
2020-02-13 19:00
Today is Valentines Day! As a hopeless romantic it is one of my favourite days of the year, where I hope everyone experiences all the love in the world.
Matt is romantic – but he ha… Read More
2020-02-12 19:00
A post by Scott Sumner said that a decade of growth in the US wasn’t good enough – and was a monetary policy failure. In New Zealand, we have had nearly a decade without a… Read More
2020-02-10 19:00
It was interesting to see Gulnara’s post about the coronavirus and the potential implications for the New Zealand economy yesterday. In it she stated that – if we use SARS to un… Read More
2020-02-09 19:00
In a recent post I discussed the impact on the broad economy associated with the coronavirus. However, this is only a starting point for thinking about economic impacts – the nex… Read More
2020-02-04 19:00
The coronavirus has been in the news, with its relatively rapid spread a cause for concern. This has important welfare and wellbeing effects associated with the pain people might exper… Read More
2020-01-29 19:00
Former Governor of the Bank of England, Mervyn King is suggesting that “Economics Needs a Post-Crash Revolution” in a seeming admission that current frameworks don’t work i… Read More
2020-01-22 19:00
Matt and myself have just returned from our wedding, honeymoon, and birthday party overseas, and I’m eager to post a lot more content this year!
However, before doing so I thought… Read More
2020-01-15 19:00
While the concept of quantitative easing has received a lot of attention amongst economists, qualitative easing was not as widely discussed. Qualitative easing is a monetary easing program t… Read More
2020-01-08 19:00
When we model production functions in macroeconomics, the broad ingredients we have for output growth are labour and capital – our factors of production. Both of these factors need to… Read More
2020-01-01 19:00
As Motu has noted, the gig economy is an emerging part of the labour market with the features of independent contracting. In the gig economy world, there is little to no cost of switching th… Read More
2019-12-25 19:00
Merry Christmas fine people!
So it is Christmas. How about this year I don’t:
Make the case for why we should give cash instead of gift.Warn about not undertaking time inconsist… Read More
2019-12-18 19:00
Last time I discussed the relationship between the cost of capital and investment.
Given that motivation, the goal of this post is to understand whether investment is responsive to change… Read More
2019-12-12 19:00
Hey TVHE. Back in the day I used to write on this site, but then all the interesting feedback and discussion on this site convinced me to do my PhD – and yesterday I finally got it aw… Read More
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