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 […]
I have been hearing anecdotes from my friends in Europe that prices in supermarkets have increased since the last couple of months. Interested I had a look online and found a number of articles outlining this around the world. According to the media, NZ shoppers have faced this as well. “Some customers have taken to […]
The pandemic confined the vast majority of us to work from home during the quarantine period. However, there are certain types of occupations such as masseuse and hairdresser that can not be performed from home. Inspired by the recent NBER paper on how many jobs can be done at home, I have calculated rough estimates […]
In my last post I noted that the “supply or demand shock” framing for COVID-19 could be useful, but hid important elements – namely even when there is a real shock if we aren’t noticing rising factor prices (eg wages) there is a demand element. Given current concerns most focus is on the question of […]
In this post I want to have a bit of a brainstorm around the real shock we are facing with COVID-19 in the country. The key idea I wanted to think about was what type of shock this is – a supply shock, demand shock, or both! Note that this is a public health crisis […]