1990

So Are Our Poor Sufficiently So?
Since the December package newspapers have oozed disdain over the unjust measures taken. Typically the editorialising has been frivolous, based simply upon appeal to the hearts over the heads of newspaper readers. Further, many of the writers have been financial columnists, displaying more than their usual ignorance of the severity of New Zealand’s economic frailty. Rather than groan about ...
31 December 1990 - welfare - Gareth Morgan

A Christmas Package of Substance
The economic package will be pivotal in determining whether recent political ‘change has been picayune. To prove it isn’t the government must deliver significant structural reform in public sector outlays and avoid the fiscal trap that terminated Labour as effective government. That trap of course was the failure to actually deliver meaningful fiscal control and instead rely on promises of ...
17 December 1990 - govt spending / budget - Gareth Morgan

Gatt Collapse: Not So Bad
The failure of the GATT to produce significant cuts in agricultural protection is an opportunity for Ni’s agricultural industry. The news holds little cheer for our producers of agricultural commodities, but they’ve been a drag on Ni’s economic performance for decades so no need to ball on their behalf4 It is critical that these producers receive signals that steer their production away from ...
9 December 1990 - overseas economies - Gareth Morgan

Silly Summits
The Economic Summit. held in 1985 decided NZ. had to reform its policy delinquency. No more use of monetary policy as the instrument of stop/start fine tuning; no more neglect,. of inflation as a disease that undermined NZ’s long term economic growth; no more use of government interventions that steered private sector investment in particular directions irrespective of what market ...
2 December 1990 - politics - Gareth Morgan

Shunning Economic Demagoguery
The vexing issue facing many monetary authorities around the world over late 1990, has been whether to tighten monetary policy to counter the inflationary trends that are arising, most recently fuelled by oil, or whether to ease monetary policy to counter recession. In Japan and Germany there has been strong economic growth so the decision is a relatively easy one to tighten monetary policy. ...
5 November 1990 - money markets / policy - Gareth Morgan

How Different We've Become
In NZ we dread a sustained oil price crisis because it will exacerbate an already weak economic performance, Australian financial markets are almost greeting that same news with delirium, Now it’s always been the case that they have been far richer in mineral wealth than we have, and are net. exporters of oil. But the impact of a rise in the oil price is multi-dimensional not only is there ...
8 October 1990 - overseas economies - Gareth Morgan

Lower Inflation?
To the extent that the agreement between the government, the CTU, and the RBNZ delivers lower inflation, then NZ is closer to the day when the risk premium accorded our interest rates by the international capital market, can drop. To the extent that the Reserve Bank accommodates a precipitous fall in interest rates on the back of an agreement that fails to deliver, we can expect yet ...
24 September 1990 - money markets / policy - Gareth Morgan

Searching For Higher Inflation
As we get nearer the election National’s support of disinflation is melting, and with it the credibility of their promised growth goals. The claim that through the policy plans they have released, economic growth of around 3% per annum will be attained was always marginal, indeed fairy stories would find this competition difficult. During the 1960s economic growth averaged around 3% pa; ...
17 September 1990 - money markets / policy - Gareth Morgan

Labour Misses The Point
The shift at mill that Labour engineered last week really is the limit. The point they choose to miss is that the reason for the widespread political disaffection manifest in the undecided vote has nothing to do with who is PM or Minister of Finance. It is a dilemma for people over what are the appropriate economic policies that NZ should be pursuing at this juncture. After three ...
10 September 1990 - politics - Gareth Morgan

Palmer May Go, But Not The Economy’s Woes
The Labour Government’s efforts to deliver to NZ a return of significant economic growth have been heavily slagged of late, with predictable effects upon the outgoing Minister of Finance. But there persists an gross deficiency of depth behind National’s alternative contribution. The chances of getting policies that force higher economic growth are not strong. The cowardice now shown ...
3 September 1990 - politics - Gareth Morgan

Oh No, Why Can't They Learn?
The release of the National Party’s Industry Policy last week was like a return visit to the chamber of horrors, and in itself should leave no doubt in the financial market’s mind bow cosmetic Jim Bolger’s appreciation is of the economic reform process New Zealand has been pursuing. The National Party has already begun down the slippery slope toward re-legitimising inflation; has released ...
28 August 1990 - politics - Gareth Morgan

Sleepwalking To Oblivion
As soon as it was released, the budget was recognised by informed opinion as fiscal malfeasance. By condemning a future government to dipping further into debt markets, and/or raising taxes, Labour continued the appalling record on expenditure, and signalled further crowding out of private sector investment. The market’s reaction was totally understandable- they sold. Now, with the ...
27 August 1990 - politics - Gareth Morgan

Costly Policy Oscillations
The reactions of the Reserve Bank Governor to the rise in long rates over the last fortnight suggests he is not abreast of the full extent to which the market rejected that budget. He expressed the view that long interest rates had risen on the back of raised inflationary expectations; expectations he suggested, that have gone too high. Now, we all know that the Governor is almost singularly ...
13 August 1990 - money markets / policy - Gareth Morgan