rmacculloch

Oct 30, 2021
1 min

So the NZ Herald knows the "full, inside story" about the Pfizer negotiations, does it?

Today the Herald jumped to the government's defense by running an article with the headline, "The Full, Inside Story of NZ's Vaccine Roll-out". The article argues that our government does not appear to bear responsibility for the delay in ordering 85% of our Pfizer vaccine supplies, which only happened in March 2021. So I've a question to the paper's editors. How on earth could the Herald be telling the "full, inside story" when Minister Hipkins replied to a question about wh

rmacculloch

Oct 29, 2021
1 min

Covid Modeling Forecast Accuracy: An Update

Stuff News ran an article back in March with the headline, "Economic forecasting's spectacular Covid failure". It stated that, "Amid this disruption, economists rapidly slashed their forecasts for GDP and employment. But economic activity has bounced back from lockdown largely unscathed .. Why did forecasters get it so wrong?". Without getting into that debate, but on the topic of forecasting accuracy, how are the Covid Case Number Modelers doing with their predictions? They

rmacculloch

Oct 28, 2021
4 min

The For-Profit Education Debate

I wrote an article for the NBR on for-profit education businesses last week. You can read it either here, https://www.nbr.co.nz/node/231842, or below: One of the publicity coups for Crimson Education has been its association with former PM John Key, who acts as an “adviser”. It’s not only him. The company also lists the former US Treasury Secretary & President of Harvard University, Larry Summers, as an adviser. And a former Auckland Grammar School headmaster is on its Board

rmacculloch

Oct 26, 2021
1 min

Down To Earth Strikes Again on QE

In a blog post in August 2020, we raised concerns about the Reserve Bank's Quantitative Easing (QE) Program, which it had just begun to embark upon. Under the heading, "You may have just signed away a fortune" we wrote that "Yesterday, the RBNZ was given permission to expand its QE program up to $100 billion. Under this scheme the Bank is using cash to buy government stock. The aim is to depress long term yields to make borrowing cheaper. But should world interest rates start

rmacculloch

Oct 22, 2021
1 min

What a blooper by the Finance Minister

Grant Robertson's 2021 Budget Speech, delivered just a few months ago, contained the following line, telling the workers of NZ how prosperous they must be feeling: "Wage growth, at nearly 3 percent a year will outpace inflation, meaning more money in Kiwis’ back pockets". As he was making that speech inflation was surging, having come in at around 5 percent this past year, far outstripping wage growth. Meaning way less money in Kiwis' back pockets. We must keep reminding ours

rmacculloch

Oct 22, 2021
1 min

Price rises are coming to a supermarket near you

The Times in the UK reports that, "The boss of one of the world’s largest consumer goods companies has warned shoppers they face a “once in a two decade” environment of rising prices across almost every household product .... Unilever said yesterday that it had offset huge inflationary pressures by pushing up prices by 4.1 per cent in the past three months. The price increases are already the biggest the business has made in a decade & Unilever warned they would continue to r

rmacculloch

Oct 21, 2021
1 min

Why our Health-care system isn't coping: an "inside", "behind-the-scenes", story.

The newspapers are reporting today how our health-care system could easily become quickly overwhelmed should virus cases soar. In particular, the NZ Herald is shocking people with the headline, "Up to 1000 operations a week are being cancelled or postponed to allow hospitals to plan for a surge in Covid admissions". Six years ago, I wrote several articles about how to reform our health system, together with a former Finance Minister, to avoid this situation. The center-piece

rmacculloch

Oct 20, 2021
1 min

National may gain (some) traction on "rules" and Labour lose (some) traction on excess "discretion"

Back in September we wrote a blog on the "rules vs discretion" policy debate. Proponents of rules-based approaches argue they are transparent & allow businesses to plan. John Taylor, the inventor of a famous rule on how to set interest rates, once characterized the choice as between "rules vs chaotic monetary policy". The rules versus discretion debate in economics is one which the Kiwi public are mostly blissfully unaware of. Yet it's a debate currently dividing the nation.

rmacculloch

Oct 20, 2021
2 min

Did the RBNZ's Deputy Governor just make a mistake? Will his White Heron turn into a Black Swan?

In a recent rambling speech given on 21 September, the Deputy Governor of the RBNZ suggested that only small increments in the OCR were being considered. This is how he described Bank strategy. A “fitting metaphor” for it, he said, took the form of a "kōtuku" (white heron). This bird, which he seems to know a lot about, is prepared to take “considered steps” as it "assesses the environment" - the source of the saying ‘tapuwae kōtuku’ ..“In the world of setting monetary policy

rmacculloch

Oct 19, 2021
2 min

How can a Blog (and Sharon) make better inflation forecasts than 250 RBNZ staffers?

Yesterday inflation rose to a little under 5%, a ten year high. We've long been forecasting sharply increasing inflation & interest rates. It wasn't rocket science, but somehow eluded the 250 staff at the Reserve Bank of NZ, as well as the Monetary Policy Committee (MPC). We commented back in April how the Bank seemed blithely unaware of the inflationary pressures erupting in the country. To the extent some such pressures were acknowledged, the Bank simply said they were "nea

rmacculloch

Oct 18, 2021
1 min

ACT Promotes a Down To Earth Policy

Back in April of this year, we predicted on this Blog that vaccine hesitancy may become a significant issue for NZ in the ensuing months. So my colleague here at Down To Earth, Brogan Powlesland, suggested a policy to help overcome this problem. In a post called "Cash for Vaccines", Brogan suggested the following, "Offer every adult $250 to take both vaccines. At a total cost of around $1bn, it may be the most cost-effective way of avoiding lockdowns, which have come at far g

rmacculloch

Oct 18, 2021
2 min

Was this year's Economics Nobel Prize a Mistake?

The minimum wage debate has been highly controversial in this country, like many others. Especially since our Labour government hiked the minimum wage recently. Business lobby groups in NZ argued strongly that such a policy would cause jobs to be lost. However, more left-leaning commentators argued at the time that they had science and "the experts" on their side, in the sense that increases in the minimum wage have not been found to cause jobs to be lost. The academic eviden

rmacculloch

Oct 17, 2021
2 min

The PM said Medical Experts helped us through Covid. So why aren't they wanted on the Health Board?

It has been announced that Rob Campbell has been appointed as Chair of Health NZ to help chart the future of our health system. He's a former casino boss, having been Chair of SkyCity Entertainment. He gave a talk to my class a few years ago. Great guy, tons of commercial experience, even studied economics (!) Yet is he a doctor? No. Does he have medical training? No. Surely then he's supported by other "interim health board members" who know about such matters? Like Amy Adam

rmacculloch

Oct 15, 2021
1 min

What's the Top Priority on Climate Change? Not what NZ's Green Party would have you believe it is.

An old acquaintance of mine in the UK, Paul Klemperer, who is the world's leading auction theorist, and was the principal designer of Britain's mobile-phone license auction that raised £22 billion in 2000-02, wrote an article awhile ago called, "What's the Top Priority on Climate Change?' He was also an adviser to the British government on the world's first auction for greenhouse gas emissions reductions, working with Nobel prizewinner, Eric Maskin. After reading his article

rmacculloch

Oct 13, 2021
1 min

Our Populist Central Bank

One of the primary features of "populism" is a distaste of elites, which often includes academics and intellectuals. On that note, the RBNZ just issued a Press Release on its' "Senior Leadership Team Structure". Apparently this group has been put in place to achieve the "Bank's Vision" being "Great Team, Best Central Bank". Of the seven people listed on the link below, the majority have never studied economics. And one of the few who has is leaving. Not one has had an academi

rmacculloch

Oct 8, 2021
2 min

Whilst Wellington's vaccine steam-ship wasn't even smoking, it was warp-speed elsewhere

Normally we wouldn't dwell on an issue like our sluggish vaccine roll-out. But it's an ongoing story since our government has gone to great lengths to discredit those of us who've been reporting on this matter the past six months. After National MP Chris Bishop discovered that Pfizer waited six weeks last year for a meeting with Wellington bureaucrats after requesting one from them, he observed, "By the time Government got its act together to get into position to negotiate ag

rmacculloch

Oct 7, 2021
1 min

So the Kiwi government doesn't want new vaccines developed to fight new virus variants?

Whilst our nation has bet its future on the Pfizer vaccine to help us move forward with our lives, the PM just delivered a speech at the United Nations in which she supported "a waiver of intellectual property protections for vaccines & other measures to increase availability". So what's Minister Chris Hipkins (aka "Chippy") saying to Pfizer? Maybe something along the lines of, "Please can you deliver us more vaccines quicker & put us at the front of the queue & oh, by the wa

rmacculloch

Oct 6, 2021
2 min

Is the RBNZ about to spark a financial crisis?

Today inflation hit a near ten year high and is forecast to go higher still, to above 4%. As a result, the Reserve Bank of NZ hiked the Official Cash Rate. So, by the way, what is the effect of a pandemic on the inflation rate? According to our very same Reserve Bank, the answer is: "The global economic disruption caused by the Covid-19 pandemic is expected to .. lead to lower economic growth, employment & inflation both in NZ & abroad". Oh, so the answer is lower inflation,

rmacculloch

Oct 5, 2021
2 min

A Man who Lost an Empire. A Woman who Lost a Nation?

The slide down our "lock-down" levels has led to a most extraordinary & unexpected comparison with the demise of the Soviet Union. Before the breakup of that Empire, it was a "closed" economy, where command-and-control rules reigned supreme. A "hermit" kingdom. There were severe restrictions on freedom-of-assembly and freedom-of-travel. Breakers of the rules could be "dobbed in". Sound familiar? Almost certainly without ever intentionally inviting the comparison we're about t

rmacculloch

Oct 1, 2021
2 min

Newsroom refutes the 2019 Nobel Prize in Economics!?

Newsroom, a media outlet that lists as its "partners" the likes of Bell Gully, Universities of Auckland, Otago and Victoria, is running a prominent article today with the heading: "Bribery & punishment rarely work to incentivize good behavior, so John Key should put down the wooden spoon about vaccine-hesitant people .. When I read [him] suggesting 'incentives' (offering a mix of material 'rewards' for getting vaccinated & sanctions for not) should make up a core part of our

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Robert MacCulloch

rmacculloch1@gmail.com

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