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Comments on: Does the Bank see petrol prices as anti-inflationary? http://www.tvhe.co.nz/2008/10/23/does-the-bank-see-petrol-prices-as-anti-inflationary/ The Visible Hand in Economics Wed, 26 Nov 2008 19:02:40 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Picks for the December RBNZ meeting « The visible hand in economics http://www.tvhe.co.nz/2008/10/23/does-the-bank-see-petrol-prices-as-anti-inflationary/#comment-3120 Wed, 26 Nov 2008 19:02:40 +0000 http://tvhe.wordpress.com/?p=1697#comment-3120 […] Petrol price collapse (which might be seen as inflationary), […]

]]> By: Reserve Bank to slash rates to 5.5%? « The visible hand in economics http://www.tvhe.co.nz/2008/10/23/does-the-bank-see-petrol-prices-as-anti-inflationary/#comment-3119 Tue, 18 Nov 2008 23:00:31 +0000 http://tvhe.wordpress.com/?p=1697#comment-3119 […] Another factor is “inflation” – petrol prices have fallen drastically, implying that annual growth in the CPI will also fall. However, this isn’t a decline in inflation, which is the trend rate of growth in the price level. Cutting on the basis that the headline figure for inflation will collapse is a risky strategy – as it ignores the fact that once the decline in petrol prices falls out of the data future increases in the CPI will be greater, as it implies that domestic demand will be higher than it would have been otherwise. In fact, recently the Bank appears to be implying that the more petrol prices falls, the greater actual inflationary pressures are (here). […]

]]> By: Matt Nolan http://www.tvhe.co.nz/2008/10/23/does-the-bank-see-petrol-prices-as-anti-inflationary/#comment-3118 Thu, 23 Oct 2008 21:05:47 +0000 http://tvhe.wordpress.com/?p=1697#comment-3118 “I thought the conclusion was that the net impact on interest rates was zero”

Which must imply that the the impact of petrol prices on medium term inflation is zero.

]]> By: Miguel Sanchez http://www.tvhe.co.nz/2008/10/23/does-the-bank-see-petrol-prices-as-anti-inflationary/#comment-3117 Thu, 23 Oct 2008 21:03:24 +0000 http://tvhe.wordpress.com/?p=1697#comment-3117 I thought the conclusion was that the net impact on interest rates was zero – falling petrol prices certainly have an impact on inflation, but the relationship is less supply-side inflation now, more demand-side inflation later.

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