The latest speech by the RBA’s Governor Philip Lowe, they have ruled out negative interest rates as an alternative monetary policy option for Australia in the near future. In the discussion, the RBA outlined the cost side of this tool, namely “They can also encourage people to save more, rather than spend more, so they […]
Today I am going to discuss the relationship between the gender pay gap and wage stickiness. Wages are termed sticky when they don’t adjust to the optimal level driven by the changes in labour market conditions. The interaction between sticky wages and economic shocks helps to generate the business cycle, and also causes a lot […]
Over the past few weeks I’ve been working mostly from home as part of the COVID lockdown. However, now with the move back to Level One I’m heading back into the office on a more full-time basis. In the first few days back, I have heard a lot of people from around the building talking […]
In this post I am going to talk about price rigidities/stickiness. What do economists mean about price rigidities and how do we test them? On the face of it this sounds pretty simple – if prices change often then there doesn’t seem to be much scope for them to be sticky. But when we think […]
New Zealand banks noticed an increase in cash withdrawals by households since the day of lockdown announcement. Banks believe this might be due to the panic stockpiling of nervous households as was mentioned in the article. In this post I want to discuss what drives the households to behave in this way, and how this […]
Inflation went up to 2.5% in the March quarter, its highest rate since 2011. This was a fair amount above expectations, with the RBNZ expecting a 2.2% rate. They were not alone with private sector forecasters also expecting weaker inflation outcomes. This raised two questions from me: Is this evidence that COVID was a supply […]