Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the jetpack domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131

Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131

Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the avia_framework domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131

Warning: Cannot modify header information - headers already sent by (output started at /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php:6131) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/feed-rss2-comments.php on line 8
Comments on: Is New Zealand heading for a recession? http://www.tvhe.co.nz/2007/09/12/is-new-zealand-heading-for-a-recession/ The Visible Hand in Economics Tue, 11 Sep 2007 23:23:48 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: CPW http://www.tvhe.co.nz/2007/09/12/is-new-zealand-heading-for-a-recession/#comment-308 Tue, 11 Sep 2007 23:23:48 +0000 http://tvhe.wordpress.com/2007/09/12/is-new-zealand-heading-for-a-recession/#comment-308 I’m unconvinced that we ever “need” a recession. Krugman is quite good on this:

http://www.pkarchive.org/cranks/hangover.html

Given the inflation situation, it’s possible that monetary policy will need to be tight for some time, but there’s no reason that we can’t have rebalancing, housing correction, and a reduction in inflation pressures without the economy slowing more than it already has.

We’ve already had one “growth” recession in 2005 q3-4 – heck, it was about 0.1 percentage points away from being a real recession. It didn’t exactly help rebalancing much (OTOH, it didn’t hurt the household sector much either).

Growth has basically averaged 2% over the last two years. That’s slow already. I wouldn’t expect it to be noticeably different from that over the next year, although a large change in composition (exports instead of consumption) may certainly change the way the public perceives the economy.

I’d answer your important question with a bit of a), a bit of b), and a bit of c) blaming someone else: our imbalances are partly the result of being out of sync with global growth, the large global savings imbalance, and Japan’s super loose monetary policy.

]]>