The Reserve Bank’s latest round of consultation on a possible central bank digital currency (CBDC) closes today. The thick and probably expensive (at least one of the documents was produced jointly with the consultancy firm Accenture) set of consultation documents came out a few months ago. I thought I had run out of time to ..read more

Government departments are now all required by law to write and publish a Long-term Insights Briefing at least every three years. and they have to consult the public on both choice of topic and the draft report The Public Service Commission gives its take on these provisions here Count me more than a little sceptical ..read more

A week or so back I did a post, prompted by some tweets by @Charteddaily, about the Reserve Bank’s big-spending plans for the current (24/25) financial year – the financial year, that is, in which many Wellington bureaucracies are facing quite some considerable expenditure restraint/cuts, most particularly those that don’t really do stuff that directly faces members of the general public. There was the 20 per cent planned increase in spending on staff salaries – with inflation coming down it must be a big increase planned in staff numbers, and the really extraordinary $35 million planned spend ..read more

The Reserve Bank’s Monetary Policy Committee yesterday delivered their latest OCR review. In my post on Tuesday, in which I suggested that an OCR cut was appropriate now, I’d noted As it happens, yesterday was another reminder that it is unwise ever to bet against Reserve Bank induced volatility, sometimes intended, sometimes not. You’ll recall that the May MPS (forecasts and words) was a lurch in the hawkish direction. This was their OCR track, revised out and up, showing an on-balance probability of OCR increases for the rest of this year, and nothing below the current rate until the August ..read more

I was away when Reserve Bank chief economist Paul Conway gave his recent speech, “The road back to 2% inflation”, and since I didn’t see any material commentary on it I didn’t bother going back to it when I got home. But my son – honours student researching monetary policy (anyone wanting a young economist at the end of year, get in touch…..) – prompted me to finally do so. And since I’ve been quite consistently critical of the lack of serious speeches from the MPC members, I shouldn’t overlook the handful (even if they are just selling a party line, rather than really opening up issues and al ..read more

This coming Sunday will be the 40th anniversary of the 1984 election, which ushered in a decade of radical economic reform in New Zealand. The Listener magazine has a cover story (or set of them) on “Rogernomics and how it continues to shape our lives”. The first article is by Danyl McLauchlan (and isn’t bad in itself, even if it could have done with some economic policy fact-checking in a few places), which the contents page introduced with the description that the accelerated reform programme was a “momentous shift in direction for a country on the brink of bankruptcy”. The only problem with ..read more

It isn’t something I’d usually recommend (or even do myself) but the useful new Twitter account @Charteddaily (basically one interesting New Zealand chart a day) posted a couple of charts drawn from the suite of Reserve Bank documents that were released last Thursday, and they piqued my interest (and, for reasons you will see below, concern). But first, also on Thursday there was some attempt by the government to defend the extraordinary reappointment (yet again) of Neil Quigley as chair of the Reserve Bank’s board (which I’d written about, and lamented, here). The Herald’s Jenée Tibshraeny ha ..read more

Since taking office, the new government has replaced quite a number of chairs of government entities. I’m sure there are many others but NZTA, Health NZ, Pharmac, and the FMA are just the examples that spring to mind. It isn’t uncommon for such changes to be made, and in many government entities board members can be replaced at will by the government of the day. It isn’t so for the Reserve Bank. Mostly, board members (including the chair) can only be replaced at the end of their terms. This is consistent with notions of the operational independence of the Reserve Bank, and much the same provis ..read more

Richard Prebble, once upon a time an Associate Minister of Finance, has a column in the Herald this morning which he devotes to the twin causes of bashing the Reserve Bank and singing the praises of an interesting nowcasting data project run by a Massey academic, GDP Live. I’m quite partial to a fairly critical approach to today’s Reserve Bank of New Zealand (even had a post in mind on the very subject for today), but I don’t find Prebble’s stick to beat them with – GDP Live – particularly persuasive on this occasion. This was the abstract from the authors’ 2018 paper (on the website at the li ..read more

The Treasury yesterday hosted the first in their new series of guest lectures, under the broad heading “Fiscal Policy for the Future”. In introducing the series Dominick Stephens, Treasury’s chief economist, told us that the focus would be on three sub-headings: policy dimensions around fiscal sustainability, the potential stabilising role of fiscal policy, and ideas around value for money. Which sounds fine I suppose, but it perhaps wasn’t a great example of reading the times that the first lecture was about an idea that would, when it was used, involve the Crown simply giving away a lot more ..read more