In my post yesterday, I noted (with illustrations) that looking back over at least the last 20 to 25 years:
…our interest rates (a) are and have been higher than those abroad, (b) this is so for short and long term interest rates, (c) is true even if we look just at small countries, and (d) is true in nominal or real interest rate terms. And the gap(s) shows no sign of closing.
Not much about that is really controversial at all. But quite why these gaps have been large and persistent is more contested. It isn’t the sort of stuff the mainstream media focuses on – they tend to be more interested in the historically low level of (New Zealand and foreign) interest rates – but getting to the correct answer matters, not just analytically but in thinking about policy responses to New Zealand’s long-term economic underperformance.
In thinking about the issue…
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Utopia, you are standing in it! 
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