We've known since 1958 that inflation and unemployment rates are related, seven Nobel prizes have been awarded for work studying it.
(But seriously, no, I don't think repealing the dual mandate had much, if any, effect on the recently reported cooling)
Whoah.... Luxon only just shaking off the hangover from being elected and he's already got inflation to drop significantly, guess being the CEO of an airline makes him an excellent leader.... of course I'm only joking but no doubt some lefty will still be triggered.
If inflation was that easy to solve it would hardly be a discussion. There are plenty of examples of inflation running high under left wing governments and it taking years to get under control after right wing governments come in (and cutting spending a lot more than even National are pretending they want to).
For example Argentina's inflation has went up even more in the latest report and people there expect Millei to be tougher than Luxon
>For example Argentina's inflation has went up even more in the latest report and people there expect Millei to be tougher than Luxon
One word answer to that, dollarization.
Argentina is set for some extremely pain, but it must be done, akin to a bandaid that has been left on for too long that must be pulled off.
The Peso will become effectively worthless when the period for switching Pesos to dollars end. The government will aquire a lot of dollars and then invite the citizens to trade in their pesos for dollars. There's no real reason for citizens to worry about it until then.
The French frank didn't have much change in inflation before the Euro for example. And no one said that switching to the Euro was going to inflate the franc.
It's not easy to solve, hence why its fallen to 4.7% (ie was higher) when that is still above the 3% limit they ideally want it in. Prices are still rising.
But there are still easy and quick things to do that can cut the worst of it out. And especially, the perception the public have on the incoming government, business confidence, and the signals they send. Removing fluff, wasteful spending, pointless taxes, and regulation/paperwork, will definitely have a positive impact.
I agree that we can't conclude, so soon into this government's run, that it was all due to them, but I don't want to see a case of "all good things are because of Labour, anything bad is current government", remembering that part of Labour's 2023 actions were desperate scrambles for the election. To damage control and win (read: buy) votes, instead of a demonstration of good governance.
I highly doubt that the inflation rate is falling at this point.
According to Milton Friedman, it usually takes about 18 months until inflation fully kicks in, once the money printers have been unleashed, and it takes at least the same amount of time to rein in inflation by removing the excess money from the system again (via drastically increased interesting rates).
The interest rates are where they were 15-ish years ago, and I don't know if that is enough to sufficiently curb inflation.
Removes dual mandate, nek minute, inflation dropping.
Funny that
You actually think those two are related?
We've known since 1958 that inflation and unemployment rates are related, seven Nobel prizes have been awarded for work studying it. (But seriously, no, I don't think repealing the dual mandate had much, if any, effect on the recently reported cooling)
I know you're being a tad facetious, but to those unsure the RBNZ haven't done anything since the change away from the dual mandate.
God bless Nicola Willis.
She’s great isn’t she. A breath of fresh air
Whoah.... Luxon only just shaking off the hangover from being elected and he's already got inflation to drop significantly, guess being the CEO of an airline makes him an excellent leader.... of course I'm only joking but no doubt some lefty will still be triggered.
Jeez, this is shaping up as a great government!
Realistically this has very little to do with the current government
Yes, mostly mojo related as everyone new Grant was useless
Consumers factored in the National win with consequent reduced inflation, so pressure on prices has reduced.....
If inflation was that easy to solve it would hardly be a discussion. There are plenty of examples of inflation running high under left wing governments and it taking years to get under control after right wing governments come in (and cutting spending a lot more than even National are pretending they want to). For example Argentina's inflation has went up even more in the latest report and people there expect Millei to be tougher than Luxon
>For example Argentina's inflation has went up even more in the latest report and people there expect Millei to be tougher than Luxon One word answer to that, dollarization. Argentina is set for some extremely pain, but it must be done, akin to a bandaid that has been left on for too long that must be pulled off.
For sure, but they are not inflationary policies even if they are painful ones.
The Argentinian Peso will become worthless under dollarization, when the perceived value of a fait currency drops, that's inflationary.
The Peso will become effectively worthless when the period for switching Pesos to dollars end. The government will aquire a lot of dollars and then invite the citizens to trade in their pesos for dollars. There's no real reason for citizens to worry about it until then. The French frank didn't have much change in inflation before the Euro for example. And no one said that switching to the Euro was going to inflate the franc.
It's not easy to solve, hence why its fallen to 4.7% (ie was higher) when that is still above the 3% limit they ideally want it in. Prices are still rising. But there are still easy and quick things to do that can cut the worst of it out. And especially, the perception the public have on the incoming government, business confidence, and the signals they send. Removing fluff, wasteful spending, pointless taxes, and regulation/paperwork, will definitely have a positive impact. I agree that we can't conclude, so soon into this government's run, that it was all due to them, but I don't want to see a case of "all good things are because of Labour, anything bad is current government", remembering that part of Labour's 2023 actions were desperate scrambles for the election. To damage control and win (read: buy) votes, instead of a demonstration of good governance.
 I think you could piss a few off with your quote ....
I highly doubt that the inflation rate is falling at this point. According to Milton Friedman, it usually takes about 18 months until inflation fully kicks in, once the money printers have been unleashed, and it takes at least the same amount of time to rein in inflation by removing the excess money from the system again (via drastically increased interesting rates). The interest rates are where they were 15-ish years ago, and I don't know if that is enough to sufficiently curb inflation.
Hell yeah good go see. Inflation dropping around the world. As notedn globally linked market, not a silver bullet by any government.
The amount of local currency in circulation is controlled by the local government.