New Zealand’s interest rates have been higher than those in the rest of the advanced world for decades. Making sense of why is one element – I argue an important one – in getting to the bottom of why New Zealand’s relative economic performance has been so poor, and in particular why we’ve made up no ground relative to most other advanced countries in the last 25 years or so. Our productivity growth has been slower than that of most other advanced countries, and after a disastrous few decades we entered the 1990s already less well off than the typical advanced country.
If we had good comparable data for the earlier decades (say 1950s to 1970s), and market prices had been free to reflect underlying pressures, our interest rates would have been higher than those in the rest of the advanced world then too. Instead, we made much greater use…
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Utopia, you are standing in it! 
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