Insights

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Time to revise the TWI to reflect modern New Zealand’s export profile - NZIER Insight 45

People are worried about the damage the strengthening exchange rate might be doing to the export sector, but the headline exchange rate measures don’t capture burgeoning emerging market trade.

People are worried about the damage the strengthening exchange rate might be doing to the export sector, but the headline exchange rate measures don’t capture burgeoning emerging market trade.

 


Each year NZIER devotes some of its resources to undertake and make freely available economic research and thinking aimed at promoting a better understanding of New Zealand’s important economic challenges. The preparation of this paper was funded from those resources.

Migrants increase our incomes - NZIER Insight 44

A new Insight from the New Zealand Institute of Economic Research (NZIER) shows that increasing net migration would lift incomes not just for immigrants but for the native population.

Bring more migrants to increase incomes

A new Insight from the New Zealand Institute of Economic Research (NZIER) shows that increasing net migration would lift incomes not just for immigrants but for the native population.
An additional 40,000 people a year for 10 years increases GDP per capita by a chunky $410 a year.

NZ petrol prices reflect input costs not gouging - NZIER Insight 43

Often motorists complain that petrol companies are quick to raise petrol prices at the pump but then conspire to drop prices slowly when international oil prices fall. Like in any efficient market, changes in the cost of oil – both up and down – should be passed on to consumers rapidly. We run the numbers and find no evidence of opportunistic gouging. Petrol companies pass on oil price decreases to consumers just as quickly as they pass on increases in prices.

Often motorists complain that petrol companies are quick to raise petrol prices at the pump but then conspire to drop prices slowly when international oil prices fall. Like in any efficient market, changes in the cost of oil – both up and down – should be passed on to consumers rapidly. We run the numbers and find no evidence of opportunistic gouging. Petrol companies pass on oil price decreases to consumers just as quickly as they pass on increases in prices.

Should a board set interest rates? Not if it compromises monetary policy objectives - NZIER Insight 42

“Using a group to make monetary policy might improve decision-making but using a board simply to represent industry, risks compromising the Reserve Bank’s independence and the goals of monetary policy.” said Dr Kirdan Lees, Senior Economist at NZIER.

The Greens’ idea to use the Reserve Bank Board to make monetary policy might improve decision-making but using a board designed to represent industry, risks compromising the Reserve Bank’s independence and the goals of monetary policy.

NZ is no Greece or Italy, but needs to face up to long term issues - NZIER Insight 41, March 2013

Like much of the world, New Zealand’s economy is still feeling the lingering consequences of the global financial crisis and the hang-over of its own asset price bubble. The economy is recovering slowly. In the last few years, households have spent cautiously and paid down mortgages. This was an adjustment that needed to happen. But net foreign liabilities are still very high and recent credit growth raises concerns that the adjustment has not been enough. Major action will be needed to contain the ageing-related growth in government spending that is about to hit us, and lift economic growth. Steps have been made in the right direction, but further reforms are needed. New Zealanders need to be prepared to make sacrifices in the short run to make progress in the long run. The longer we delay action, the bleaker our prospects.

Like much of the world, New Zealand’s economy is still feeling the lingering consequences of the global financial crisis and the hang-over of its own asset price bubble.

The host with the most? Rethinking the costs and benefits of hosting major events

Hosting large events like the Rugby World Cup are expensive undertakings. That makes value-for-money evaluation critical. But most impact event analysis doesn’t stack up, missing displacement effects. It means benefits are often far smaller than people think.

Hosting large events like the Rugby World Cup are expensive undertakings. That makes value-for-money evaluation critical. But most impact event analysis doesn’t stack up, missing displacement effects. It means benefits are often far smaller than people think.

Use macro-prudential tools to improve inflation targeting - NZIER Insight 39

Before Graeme Wheeler starts his new job as Governor of the Reserve Bank, he must sign a new Policy Targets Agreement (PTA) that sets the goalposts for monetary policy. This is an opportunity to introduce macro-prudential tools to help ease the exchange rate impact of inflation targeting.

Before Graeme Wheeler starts his new job as Governor of the Reserve Bank, he must sign a new Policy Targets Agreement (PTA) that sets the goalposts for monetary policy. This is an opportunity to introduce macro-prudential tools to help ease the exchange rate impact of inflation targeting.

Regional economic integration: more than one way to skin a cat - NZIER Insight 38

Recent angst about trade agreements challenging domestic regulatory power distracts from an undeniable truth: the international implications of domestic regulatory settings have never been more important for New Zealand businesses. Rather than fighting it, New Zealand policymakers and firms need to better understand how changes to domestic regulation that are taking place in an environment of closer regional cooperation can enhance productivity, growth and incomes.

Recent angst about trade agreements challenging domestic regulatory power distracts from an undeniable truth: the international implications of domestic regulatory settings have never been more important for New Zealand businesses. Rather than fighting it, New Zealand policymakers and firms need to better understand how changes to domestic regulation that are taking place in an environment of closer regional cooperation can enhance productivity, growth and incomes.

Demographic change a force that firms ignore at their peril - NZIER Insight 37

New Zealand's population is ageing – confronting firms to respond to the opportunities an ageing population brings. The most successful firms will need to have a clear understanding of the impacts of demographic change on not just consumer demand, but also the supply side of business. This means putting in place strategies to address the impact of ageing on the make-up of the workforce, succession planning and where new ideas will come from.

New Zealand's population is ageing – confronting firms to respond to the opportunities an ageing population brings. The most successful firms will need to have a clear understanding of the impacts of demographic change on not just consumer demand, but also the supply side of business. This means putting in place strategies to address the impact of ageing on the make-up of the workforce, succession planning and where new ideas will come from.

Apple industry gained millions through science and marketing - NZIER Insight 36

Consumers, supermarkets and distributors in Germany and the United Kingdom have been demanding reduced chemical use on fruit. The innovative growing programme ‘Apple Futures’ brought scientists and growers together to figure out how to reduce sprays and residues while producing export-quality fruit. Analysis from NZIER found that the research programme preserved between $25m and $35m per year of industry net income from 2008 to 2011, at a research cost of $3.2m. In just four years, the apple industry earned up to an extra $113m by reducing chemical residues to one-tenth of the maximum set by the European Union.

Consumers, supermarkets and distributors in Germany and the United Kingdom have been demanding reduced chemical use on fruit. The innovative growing programme ‘Apple Futures’ brought scientists and growers together to figure out how to reduce sprays and residues while producing export-quality fruit. Analysis from NZIER found that the research programme preserved between $25m and $35m per year of industry net income from 2008 to 2011, at a research cost of $3.2m.

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