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Comments on: Japan’s economy in free fall: What does this mean for NZ? http://www.tvhe.co.nz/2009/02/17/japans-economy-in-free-fall-what-does-this-mean-for-nz/ The Visible Hand in Economics Tue, 17 Feb 2009 20:05:15 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2009/02/17/japans-economy-in-free-fall-what-does-this-mean-for-nz/#comment-14752 Tue, 17 Feb 2009 01:20:27 +0000 http://www.tvhe.co.nz/?p=2888#comment-14752 “But Matt, on the other hand, Japan also imports from us, so a sick Japan could mean a reduction in our exports.”

Very much. They are our third biggest trading partner (accounting for 8.4% of our 2008 trade) and they are a major trading partner to Aussie, China and the US (who are the other top three);

Originally I was going to write this in the post – but I sort of moved away from it. We have to keep in mind that New Zealand sells soft commodities – if demand for soft commodities is incredibly income inelastic (relative to manufactured goods) then it is possible that New Zealand could fare relatively well in this crisis.

I think the idea that a global recession would “lower the cost of manufactured goods” in the short term is underplayed …

]]> By: Paul Walker http://www.tvhe.co.nz/2009/02/17/japans-economy-in-free-fall-what-does-this-mean-for-nz/#comment-14750 Tue, 17 Feb 2009 01:11:02 +0000 http://www.tvhe.co.nz/?p=2888#comment-14750 But Matt, on the other hand, Japan also imports from us, so a sick Japan could mean a reduction in our exports.

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