4 Comments

Before the RBNZ started mindlessly increasing the OCR to counter inflation by driving people out of work, maybe they should have assessed how much domestic inflation is profit-price driven. This is especially so in a small economy like ours, where so much of the CPI components are dominated by the oligopolies who rig the prices for power, groceries, oil, building supplies, air fares, banking, etc. Considering the sort of salary that Conway is 'earning' & the huge research facilities available to him, why the hell didn't he & his colleagues investigate the profit-price spiral a long time ago?

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If the RBNZ had actually got on top of inflation early, and hadn’t wasted months calling inflation “transitory”, the inflationary impact of the cyclone impacts would be mild. Things like removal of LVRs, failing to roll back monetary stimulus and facilities like the FLP, were all massive own-goals that could (and should) have never occurred.

The real risk now is that by “looking through” the cyclone impacts, while inflation is well outside the target band, has massive risk of exasperating the earlier mistakes.

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The "micro data" RBNZ still needs to look into? Ya mean, like the financial reports on profitability and lines of business put out by every public company?

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Bizarre that the non-tradeable inflation indicators haven't been re-weighted since 2003!! Given the structural shifts in the global/NZ economy over that time, the impact of RBNZ decisions on so much of NZ economy, and the central role of data in driving those decisions, WTF have they been playing at!?

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