Translating central bank speak
Am I the only one who spends a lot of time trying to translate RBNZ communication into English? Below is a quick take in 200 fewer words what I think the key messages are from the October OCR announcement: Read more
Archive for month: October, 2013
Home ownership causing higher unemployment. Just how would we react?
Interesting article here on the ‘Oswald Hypothesis’ – a link between housing ownership and unemployment.
The basic argument seems to be if you live in a house your less likely to move to where jobs are because of the transaction costs associated with selling your house and moving from one community to another. So when you are made redundant – you opt for welfare rather than moving to another place.
This seems more plausible in the provinces than in cities. Read more
Labour day: Jobs as a cost?
Today is Labour Day in New Zealand – and given I’ve written about “co-ordination” so recently I can’t do one of those posts where I talk about public holidays as a co-ordination device. Instead I intend to discuss the costs and benefits of “jobs” – or the costs of benefits of supplying your labour 😉
The folly of excluding GST when discussing tax
Over on Kiwiblog I saw the title “tax system has got more, not less, progressive“. I thought that sounded interesting, but after looking at the post, and Bill English’s initial release, I realised that this was actually false. Danyl from Dim Post was right when he notes: Read more
Breaking windows, doors, and GDP
This week Mieke Welvaert discussed (Infometrics link) the broken window fallacy.
GDP measures the value produced within a geographic entity.
Even though it seems damaging property could increase GDP, this is unlikely – and when it does, it does not do so in a way that increases wellbeing. In truth, it would be better if we didn’t have to repair what we have and could just add to it.
Although this is not possible in the case of natural disasters, it is possible when we can prevent destructive events from happening.
The moral of the story is: If it ain’t broke, don’t break it.
Ministry advice on LVRs
It appears an OIA request has made government ministry advice relating to loan-to-value ratio limits on mortgages available. The Herald article is here:
Linking is not approving. Read more