The Reserve Bank announced: “Following the completion of the review commissioned by the Board in March, we are pleased to announce modernised capital rules that will support an efficient and resilient financial system,” said Rodger Finlay, Chair of the RBNZ Board. “We recalibrated our risk appetite to have regard to our new Financial Policy Remit,…
Reserve Bank sees sense
Reserve Bank sees sense
08 Jan 2026 Leave a comment
in business cycles, macroeconomics, monetary economics, politics - New Zealand
Why Care About Debt-to-GDP?
06 Jan 2026 Leave a comment
in econometerics, economic history, international economics, macroeconomics
Here is another piece for “contrarian Tuesday,” like it or not: We construct an international panel data set comprising three distinct yet plausible measures of government indebtedness: the debt-to-GDP, the interest-to-GDP, and the debt-to-equity ratios. Our analysis reveals that these measures yield differing conclusions about recent trends in government indebtedness. While the debt-to-GDP ratio has…
Why Care About Debt-to-GDP?
US Growth: From Hours Worked or Productivity Gains?
30 Dec 2025 Leave a comment
in applied price theory, econometerics, economic growth, economic history, labour economics, labour supply, macroeconomics
US economic growth can be divided into two parts: more hours worked, or more productivity per hour worked. In the past, the US labor force has been rising over time: the US labor force totaled 107 million people in 1980, 142 million in 2000, and was up to 171 million this year. However, after several…
US Growth: From Hours Worked or Productivity Gains?
Celebrating Two Years of Libertarian Success in Argentina
27 Dec 2025 Leave a comment
in applied price theory, Austrian economics, budget deficits, comparative institutional analysis, constitutional political economy, development economics, economic growth, economics of bureaucracy, economics of regulation, fiscal policy, growth disasters, history of economic thought, income redistribution, industrial organisation, labour economics, liberalism, libertarianism, macroeconomics, Public Choice, rentseeking, unemployment Tags: Argentina
As explained in my four-part series (here, here, here, and here) and in this clip from a recent interview, Javier Milei’s first two years have been amazingly successful. There are two points in the interview that deserve emphasis. First, Javier Milei’s libertarian policies already have been extremely beneficial for the Argentine economy. Inflation has dramatically […]
Celebrating Two Years of Libertarian Success in Argentina
AI summary of my living wage paper
24 Dec 2025 Leave a comment
in applied price theory, history of economic thought, income redistribution, job search and matching, labour economics, labour supply, macroeconomics, minimum wage, politics - New Zealand, poverty and inequality, Public Choice, rentseeking Tags: living wage
Lessons from Brexit
19 Dec 2025 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economic growth, international economic law, international economics, macroeconomics Tags: British politics, economics of customs unions, free trade, tariffs
How we connect economically with the world is critical. Brian Easton writes – The British Labour Government is struggling. Partly it is because they were badly prepared in opposition: the Conservative Government was making such a charlie of itself that Labour expected that it would do better and gave little thought as to how it […]
Lessons from Brexit
Europe’s Grim Fiscal Future
16 Dec 2025 Leave a comment
in budget deficits, economic growth, fiscal policy, labour economics, labour supply, macroeconomics, public economics Tags: ageing society, European Union, population bust
If you want to know why I’m pessimistic about Europe (particularly compared to the U.S.), this chart is a good example. It shows that many European nations have enormous long-run liabilities for their Social Security systems. It’s an understatement to observe that Spain, Austria, and Italy have very grim fiscal futures. Keep in mind that […]
Europe’s Grim Fiscal Future
Demographic Decline, Part I: Baby Subsidies Are an Ineffective Response
15 Dec 2025 Leave a comment
in economic growth, fiscal policy, labour economics, labour supply, macroeconomics, population economics, urban economics Tags: ageing society, population bust
I have a five-part series (here, here, here, here, and here) explaining that demographic decline will lead to fiscal crisis. The main takeaway is that entitlement programs are a ticking time bomb, and I castigate politicians who want to kick the can down the road (or make a bad situation even worse). This is a global problem, not merely an American problem, as […]
Demographic Decline, Part I: Baby Subsidies Are an Ineffective Response
Defending Nicola, and critiquing her
11 Dec 2025 Leave a comment
in fiscal policy, macroeconomics, politics - New Zealand
Media have reported that there may be a debate between Nicola Willis and Ruth Richardson over fiscal policy. I thought it would be useful to lay out what I see as the key fiscal problem, and put context around it. Now I’m not unbiased here. Nicola I regard as a long standing friend. We were…
Defending Nicola, and critiquing her
The state of the books
11 Dec 2025 Leave a comment
in budget deficits, fiscal policy, macroeconomics, politics - New Zealand, Public Choice, public economics
Eric Crampton writes – StatsNZ has put up its year-end accounts for the government, split out across functional areas. Their data goes back to 2009 in the main table; I’m sure earlier data’s available somewhere in Infoshare. But sticking with the Excel sheet they’ve provided, we can lob in June-year population statistics and June quarter […]
The state of the books
Three Nobel lectures in economic science
11 Dec 2025 Leave a comment
in economic growth, history of economic thought, macroeconomics
The post Three Nobel lectures in economic science appeared first on Marginal REVOLUTION.
Three Nobel lectures in economic science
Productivity growth (or lack of it)
10 Dec 2025 Leave a comment
in applied price theory, econometerics, economic growth, economic history, fiscal policy, labour economics, macroeconomics, politics - New Zealand
In a post last week I included this chart of the latest annual OECD data on labour productivity, expressed in PPP terms. It was grim, in a familiar sort of way. New Zealand’s overall economic performance has long been poor (the halcyon days when New Zealand was in the top 3 in the world relegated […]
Productivity growth (or lack of it)
Germany’s Accelerating Fiscal and Economic Decline
09 Dec 2025 Leave a comment
in budget deficits, economic growth, economic history, fiscal policy, income redistribution, labour economics, labour supply, macroeconomics, Public Choice, public economics Tags: ageing society, Germany
A lot has happened if you look at the past 100 years of German economic policy. Hyperinflation leading to Hitler’s National Socialists taking power. An impressive free-market revival after World War II. A growing welfare state after the imposition of a value-added tax in the 1960s. Some semi-impressive spending restraint starting in the mid-1990s. Very […]
Germany’s Accelerating Fiscal and Economic Decline
Political pressure on the Fed
05 Dec 2025 Leave a comment
in business cycles, econometerics, economic history, economics of bureaucracy, macroeconomics, monetary economics, politics - USA, Public Choice Tags: monetary policy
From a forthcoming paper by Thomas Drechsel: This paper combines new data and a narrative approach to identify variation in political pressure on the Federal Reserve. From archival records, I build a data set of personal interactions between U.S. Presidents and Fed officials between 1933 and 2016. Since personal interactions do not necessarily reflect political…
Political pressure on the Fed
The taxing problem of zombie and phoenix companies
04 Dec 2025 Leave a comment
in applied price theory, economics of bureaucracy, economics of crime, fiscal policy, law and economics, macroeconomics, politics - New Zealand, property rights, Public Choice, public economics, rentseeking Tags: Germany
Eric Crampton writes – Damien Grant isn’t normally the one making the case that the government needs to take more in tax. The liquidator and libertarian-minded columnist at the Sunday Star Times more typically wants what libertarians generally want – a government that spends less and that can let each of us keep more of […]
The taxing problem of zombie and phoenix companies
Utopia, you are standing in it! 
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