Welcome to the NZAE blog


The intention of this blog is to highlight economists’ work and provide material to support education and general understanding, especially as it relates to economics in New Zealand. It is not a forum for advocacy (other than better use of economics). Posts are categorised as Events, Insights or NZAE News (includes subcategories). Posts are also tagged with the JEL Classification and/or as considered appropriate (see list below). Authors are generally Councillors of the NZAE. Anyone can provide comments. Any views expressed are not necessarily those of the NZAE.

18th Central Bank Macroeconomic Modelling Workshop 7-8 Dec 2015

The Reserve Bank of New Zealand will host the 18th Central Bank Macroeconomic Modelling Workshop. The annual series of workshops aims to give policymakers and academics the opportunity to discuss issues related to the class of models used for policy analysis.

This year’s workshop on “Challenges for Open Economies” focuses on the growing real and financial linkages among economies, and their implications for policy analysis. Topics of particular interest include, but are not limited to: exchange rate determination and impacts, the terms of trade and commodity prices, international factor mobility, policy spillovers and the international dimension of inflation dynamics.

The workshop will be held at the InterContinental Hotel in Wellington, New Zealand on 7-8 December 2015.

Keynote Speakers:

Frank Smets, European Central Bank

Giancarlo Corsetti, Cambridge University

5th Auckland Finance Meeting on 17-19 Dec 2015

The Auckland Centre for Financial Research at the Faculty of Business and Law, Auckland University of Technology is hosting its 5th Auckland Finance Meeting on 17-19 December 2015. The main focus will be on empirical/econometric studies in finance. Topics include (but are not limited to): Asset Pricing; Behavioral Finance; Empirical Corporate Finance; Derivative Markets; Financial Econometrics; Financial Markets; International Finance; Market Microstructure; Risk Management; Volatility Models; Banking; etc. The academic part of the meeting will commence in the afternoon of 17 December and finishes in the afternoon of 19 December.

Prof. Peter Bossaerts – University of Utah, US
Prof. Robert I. Webb – University of Virginia, US

GEN Annual Conference 30 Nov 2015

GEN Annual Conference 2015

The 2015 GEN Annual Conference will be held on 30 November at the Intercontinental Hotel, Wellington.

The next five years will see important changes in New Zealand. We will continue to get older, we can expect more disruptive technological innovations, global markets will evolve, and major debates around inequality, regulation and the investment approach will likely continue. At this day-long conference, international and domestic experts will outline what some of the most important changes over the next five years could be and how these could affect the knowledge and skills requirements of economists in government in New Zealand.

This will include sessions on:

  • The current state of economic thinking and what this may mean for income transfer policies and regulation
  • New Zealand’s changing demographic profile
  • The changing business outlook
  • Policymaking under uncertainty
  • The investment approach to social policy

The line-up of speakers includes:

  • Hon Bill English; MP, Deputy Prime Minister, Minister of Finance
  • Prof Warwick McKibbon; Director of the Centre for Applied Macroeconomic Analysis Australian National University
  • Sir David Ramsden; Director General UK HM Treasury Chair of UK Government Economic Service
  • Prof Robert Wade; Professor of Political Economy, London School of Economics

NZAE Conference 2016 timeline and keynote speakers

The 2016 Conference will follow the highly regarded 2014 conference held in the Sir Paul Reeves Building at AUT, Mayoral Drive, Auckland. Keynotes speakers include David Teece, James K. Galbraith, John Gibson and Janet Currie.

Key Dates:
Wednesday 24th February.   First notice of conference sent out
Wednesday 24th February.   Portal for abstract submissions opens
Wednesday 23th March.   Final notice of conference sent out
Monday 28th March.   Conference registration opens
Friday 1st April.   Abstracts Due
By Monday 25th April.   Notification of acceptances
Monday 16th May.   Registration deadline for presenters
Monday 16th May.   Deadline for early‐bird registration
Monday 13th June.   Full papers due for entries to prizes
Wednesday 29th June.   Conference start
Friday 1st July.   Conference end

NZAE Speakers 2016

James Galbraith

James K. Galbraith holds the Lloyd M. Bentsen Jr. Chair of Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin.  His most recent book, The End of Normal, was published in September, 2014 by Free Press. Other books include Inequality and Instability, and What Everyone Needs to Know About Inequality.

He holds degrees from Harvard (A.B., 1974) and Yale (Ph.D. in Economics, 1981) and won a Marshall Scholarship to King’s College, Cambridge.  He has served on the congressional staff, including as Executive Director of the Joint Economic Committee, is chair of Economists for Peace and Security and Senior Scholar at the Levy Economics Institute.

In 2010 he was elected to the Accademia Nazionale dei Lincei.  In 2012, he was President of the Association for Evolutionary Economics.  He is the 2014 co-winner of the Leontief Prize for advancing the frontiers of economic thought.


David TeeceProfessor David J. Teece is an authority on subjects including the theory of the firm and strategic management, the economics of technological change, knowledge management, technology transfer, and antitrust economics and innovation. He has a Ph.D. in economics from the University of Pennsylvania, has held teaching and research positions at Stanford University and Oxford University, and has also received three honorary doctorates. Dr. Teece has testified before Congress on regulatory policy and competition policy, is author of over 200 books and articles, and is the editor of “Industrial & Corporate Change” (Oxford University Press). According to Science Watch, he is the lead author on the most cited article in economics and business worldwide, 1995–2005. He is also one of the top 10 cited scholars in economics and business for the decade, and has been recognized by Accenture as one of the world’s top 50 business intellectuals.


John GibsonJohn Gibson is Professor of Economics at the Waikato Management School. A graduate of Lincoln University, John has a doctorate from Stanford University in the United States. His teaching and research interests are in microeconomics and in the micro econometric aspects of development, labour and the international economy. John is currently a Senior Research Associate at the Motu Economic and Public Policy Research Trust. His other research interests include poverty measurement, where he is a member of an expert group advising the United Nations Statistical Division, the design and analysis of household survey data, and economic development, especially in China and other Asian and Pacific economies.


Janet CurrieJanet Currie is the Henry Putnam Professor of Economics and Public Affairs at Princeton University and the Director of Princeton’s Center for Health and Well Being. She is a member of the Institute of Medicine, a fellow of the American Academy of Arts and Sciences, the American Academy of Political and Social Sciences, and the Econometric Society, as well as past Vice President of the American Economic Association and in-coming President of the Society of Labor Economists. She is on the Board of Reviewing Editors of Science magazine and on the editorial board of the Quarterly Journal of Economics.

Her research focuses on the health and well-being of children including early intervention programs, expansions of public health insurance, public housing, and food and nutrition programs. Her current research focuses on socioeconomic differences in child health, environmental threats to children’s health, and the long term effects of poor health in early childhood.


August 2015 AI (#53) remembers Peter, Allan and Seamus

Asymmetric Information Issue 53 August 2015


  • Editorial
  • Obituary: Peter Conway
  • Obituary: Allan Catt

  • Obituary: Seamus Hogan

  • An Interview with John Yeabsley (by David Galt)

  • From the 2B RED File (by Grant Scobie)

  • ‘Frames’ (by Stuart Birks)

  • The ‘Five Minute Interview’ (Rhema Vaithianathan)

  • Blogwatch (by Paul Walker)

  • Fine Lines (by John Creedy)

  • (Motu) The impact of R&D subsidies on innovation by

    New Zealand firms (by Adam Jaffe and Trinh Le)

  • (Stats New Zealand) Improving our understanding of

    labour demand (by Daniel Griffiths)

  • Report from GEN

  • Research in Progress

    (Victoria University of Wellington)

  • The Citation for the A. R. Bergstrom Prize in


2015 NZEP Issue 2 include effects of Canterbury earthquakes

The contents of New Zealand Economic Papers, Volume 49, Issue 2, 2015 (available online or by subscription):

  • Asian stock markets, US economic policy uncertainty and US macro-shocks by Michael Donadelli
  • The short-run nationwide macroeconomic effects of the Canterbury earthquakes by Lisa Doyle & Ilan Noy
  • The effects of unemployment rate fluctuations on private health insurance coverage in New Zealand by David Chamberlain & Andrea Kutinova Menclova
  • Monetary policy and interest rates under inflation targeting in Australia and New Zealand by Hakan Berument & Richard T. Froyen
  • Revenue-maximising tax rates and elasticities of taxable income in New Zealand by John Creedy & Norman Gemmell

11th A R Bergstrom Prize in Econometrics to Michelle Lewis

Congratulations to Michelle Lewis, who was awarded the 2015 A. R. Bergstrom Prize in Econometrics for her paper “Forecasting with Macro-Finance Models: Applications to United States and New Zealand”. The Bergstrom Prize can be awarded every two years (although a three year gap ensued this time) and aims to reward the achievement of excellence in econometrics, as evidenced by a research paper in any area of econometrics.

Michelle Lewis’s Masters Thesis employs macro-finance models, which incorporate macroeconomic and timely financial market data, to forecast macroeconomic variables and the yield curve for New Zealand and the United States. The macro-finance models use the arbitrage-free Nelson-Siegel approach to represent yield curve data with just several components, and those components are combined with the macroeconomic variables of economic activity, inflation, and policy interest rates in a joint vector autoregression to produce forecasts.

The key contribution to the literature is that Michelle’s forecasting analysis is undertaken in a genuine real-time setting. That is, the model estimation and forecasts use the actual macroeconomic data that was available at each historical point in time, which realistically allows for an unavoidable uncertainty faced by practitioners. Conversely, the comparable literature to-date uses quasi-real-time macroeconomic data, which simply truncates the final available macroeconomic data series to estimate the model and produce forecasts over history. While showing promising forecasting benefits from macro-finance models, quasi-real-time analysis is unrealistic because it implicitly assumes that future revisions to historical macroeconomic data are already known at each historical point in time.

Fortunately, Michelle’s results show that, even in real time, there are still substantial forecasting benefits from using macro-finance models. The forecast improvements are most significant and robust for inflation and the policy rate, and economic activity for longer horizons. Furthermore, theoretically motivated restrictions on the yield curve dynamics improve the forecast performance of macroeconomic variables, and the yield curve itself.

However, for economic activity at short-term horizons, the forecasts from macro-finance models do not outperform forecasts from a standard vector autoregression of the macroeconomic variables. This result is at odds with the analogous quasi-real-time analysis, hence illustrating that quasi-real-time analysis can overstate the forecasting benefits of macro-finance models.

In their assessment, the adjudicators Professors Alfred Haug and Les Oxley noted: “The thesis is a substantial piece of empirical research that involved constructing new data and applying sophisticated econometric techniques that were skilfully mastered. Overall, it is an excellent piece of empirical econometrics. The author needs to be congratulated on her achievements.”

Arthur Robson awarded Distinguished Fellow of NZAE

arthurrobsonArthur Robson holds the Canada Research Chair in Economic Theory and Evolution at the University of Simon Fraser.  He has made an extraordinary contribution to economic theory, particularly microeconomic theory in the context of change brought about by competitive evolutionary pressures. His scholarship has been prodigious and has shaped the direction of enquiry by economists and, to some degree, certain biological science.

Professor Arthur Robson gained a BSc(Hons) First Class in Pure and Applied Mathematics from Victoria University of Wellington in 1968; when he won the Robert Stout award for the best degree. In 1969 he entered the Pure Mathematics PhD programme at MIT, but after two years of course work switched to a PhD in economics that he completed at MIT in 1974. His thesis was on the contemporary topic “Congestion, Pollution and Urban Structure”. His research publications – of which there are more than 60 in the upper echelon of economics journals – reveal an early interest in inter-temporal strategies and consequent effects incorporating uncertainty. By the 1990s Arthur’s publications show his strong interest in evolutionary processes and from that time a large number of publications that apply the logic of mathematical economics to the evolution of economic systems and their primitives – such as preferences. They include the effect of selection among agents that face different sorts of uncertainty. As an aside, some recall the paper – “Status, the Distribution of Wealth, Private and Social Attitudes to Risk,” Econometrica 60 (1992), 837-857, presented at Victoria – that held the result that purchase of lottery tickets can be rational if the prize is big enough.

Arthur has brought a unique insight to evolutionary game theory. We discuss two of his contributions here, selected based on being both important and easy to explain. Perhaps it is because so many of us are economists, but we game theorists do seem to have an underlying belief that a decentralized optimizing process like evolution should lead to efficient outcomes much of the time. Be that as it may, most evolutionary models do not lead to efficiency. Arthur is responsible for two of the most important papers showing how evolution can lead to efficiency. One of these is “Efficiency in Evolutionary Games: Darwin, Nash and the Secret Hand-shake,” Journal of Theoretical Biology 144 (1990), 379-396. In this paper, Arthur allows for a mutation that does two things. It leads the recipient to show a visible ‘signal’ (the secret hand-shake) that this mutation has occurred. It also leads the recipient of the mutation to make a cooperative choice when interacting with another individual who also shows this signal. In this manner, the mutants are able to benefit from cooperation when facing each other, while still being able to make an optimal choice when faced with non-mutants. Mutants with ‘secret hand-shakes’ quickly take over a population when the interactions within that population are such that cooperative behavior does not leave an agent exposed to exploitation.

Arthur tackles the fundamental mystery of human intelligence in “The Evolution of Rationality and the Red Queen,” Journal of Economic Theory 111 (2003), 1-22. Our high intelligence is clearly useful in the complex societies in which we dwell. On the other hand, our high intelligence is necessary for the formation of our complex societies. It has been argued that our exceptionally high intelligence is unnecessary for dealing with the external environment that existed prior to the formation of our societies. Many who have made this argument suggest that our societies and intelligence evolved together. However, such arguments ignore the different time scales required for evolution and the development of a society. Arthur shows how competition between humans can lead to an arms race in which we need ever greater and greater intelligence in order to succeed against other humans.  A nice feature of this approach is that as humans get smarter, the evolutionary pressure for intelligence increases. On the other hand, if intelligence occurred because of the external environment, then evolutionary pressure on intelligence would decrease the smarter humans became.

Arthur’s outstanding research achievements and scholarship are reflected in his post-PhD long-term and short-term appointments.  He started his post-PhD academic career at the University of Western Ontario (UWO) in 1975, moving to Simon Fraser University in 2003.  He overlapped with John McMillan  – NZAE Distinguished Fellow 2005 – at UWO during a very academically lively period for that economics department. Arthur has had myriad short term academic engagements in prominent institutions in North America, Europe the UK, as well as the Middle East and Australia and New Zealand.   He has received visiting Fellowships and is a Fellow of the Econometric Society among others. Arthur has been in international demand for his research per se, but also for his seminars and organisation of conference sessions and workshops on evolutionary economics.

Arthur has held continued interest in New Zealand and visited this country from time to time, including in his role of Adjunct Professor at Victoria University for 2005-2008. He has outstanding credentials for the award of Distinguished  Fellow of the New Zealand Association of Economists.

Lewis Evans and Jack Robles

Call for papers Special issue on Advances in Competition Policy and Regulation

The Applied and Theoretical Economics (ATE) Research Network (http://ate.massey.ac.nz) is calling for papers for a Special Issue on Advances in Competition Policy and Regulation. Our goal is to shed light on pressing issues in this field that are of concern to academic economists, consultants/practitioners and government policy makers. Please note that a specific New Zealand context is not a criterion for paper acceptance. Areas of interest for this issue include (but are not limited to) the following topics:
-­ Energy Economics
-­ Innovation Theory and Policy
-­ Mergers and Partnerships
-­ Competition in Vertical Chains
-­ Network Economics
-­ Empirical Industrial Economics

Deadline for submission: 1 March 2016.

Ranking: Australian Business Deans Council (ABDC) Journal Quality List -­ B ranking.

Submission: please use the online portal at https://mc.manuscriptcentral.com/rnzp. Please indicate that your paper is meant for the Special Issue on the ‘Advances in Competition Policy and Regulation’ during the submission process. Selection of papers for the Special Issue will follow peer review.

Guest Editors: 
Simona Fabrizi (email: s.fabrizi@massey.ac.nz)
Steffen Lippert (email: s.lippert@auckland.ac.nz)
John Panzar (email: j.panzar@auckland.ac.nz)

Availability: New Zealand Economic Papers is a fully peer-reviewed scholarly journal published by leading international publishers Taylor & Francis (under the Routledge imprint) on behalf of the New Zealand Association of Economists. The journal is indexed in leading international databases including EconLit, ABI/Inform and EBSCO.

2015 conference timetable available

The 56th Annual Conference of the New Zealand Association of Economists will be held at the Westpac Stadium, Wellington on July 1-3.

The programme for the approaching conference is now available at www.nzaeconference.co.nz/programme/timetable.cfm.

Registration can be completed through the conference website at www.nzaeconference.co.nz.

Any queries regarding the 2015 conference email Gail Pacheco gail.pacheco@aut.ac.nz or Mary Hedges m.hedges@auckland.ac.nz both are co-chairing this year’s conference.

Call for papers Special issue for the 50th Anniversary of NZEP

New Zealand Economic Papers will publish its 50th volume in 2016. This special edition of New Zealand Economic Papers will focus on important topics covering the past 50 years of the New Zealand economy and the study of economics in New Zealand. Papers on New Zealand economic history, the history of economic thought in New Zealand and long-term developments in the New Zealand economy will be particularly welcomed.

Please note that papers not specifically relating to New Zealand will be considered for acceptance if they cover broader topics relevant to economic history and the history of economic thought that may indirectly affect New Zealand.

New Zealand Economic Papers is a fully peer-reviewed scholarly journal (rated ‘B’ in the ABDC list) published by leading international publishers Taylor & Francis (under the Routledge imprint) on behalf of the New Zealand Association of Economists. The journal is indexed in leading international databases including EconLit, ABI/Inform and EBSCO.

Selection of papers for the special issue will follow peer review. Submissions should be made online. Please indicate that your paper is meant for the special issue for the 50th anniversary of NZEP during the submission process.

Submission deadline: 31st December 2015

Submission: To submit to New Zealand Economic Papers, go to: https://mc.manuscriptcentral.com/rnzp

Editorial Team: The Editor-in-Chief is Associate Professor Gail Pacheco (Auckland University of Technology) and the Co-Editor is Professor Arthur Grimes (Motu Research and University of Auckland). Gail and Arthur are supported by several Associate Editors and an Editorial Board drawn from New Zealand and international institutions (list).

Early bird registration until 14 May 2015

The 56th Annual Conference of the New Zealand Association of Economists will be held at the Westpac Stadium, Wellington on July 1-3.

The programme for the approaching conference is now available at www.nzaeconference.co.nz/programme/timetable.cfm.

Please take advantage of the early bird registration rate, which is offered until May 14th, accessed along with other conference details at www.nzaeconference.co.nz.

Any queries regarding the 2015 conference email Gail Pacheco gail.pacheco@aut.ac.nz or Mary Hedges m.hedges@auckland.ac.nz both are co-chairing this year’s conference.

April 2015 AI (#52) includes perspective on budget surplus

Asymmetric Information Issue 52 April 2015


  • Editorial
  • An Interview with Kerrin Vautier (by Mary Hughes)
  • The ‘Five Minute Interview’ (with Adam Jaffe)
  • From the 2B RED File (by Grant Scobie)
  • Advert for NZ-UK Link Foundation
  • ‘Frames’ (by Stuart Birks)

  • Blogwatch (by Paul Walker)

  • Fine Lines (by Arthur Grimes)

  • The budget surplus (by Norman Gemmell)

  • The price of disaster risk (by Levente Timar, Arthur

    Grimes and Richard Fabling, Motu)

  • Measuring wealth (by Ann Ball, StatsNZ)

  • Report from GEN

  • Report from Chair in Public Finance (VUW)

  • Research in Progress (Massey)

2015 NZEP Issue 1 offers some insights into dairy farm profitability, among other things

The contents of New Zealand Economic Papers, Volume 49, Issue 1, 2015 (available online or by subscription):

  • An analysis of benefit flows in New Zealand using a social accounting framework by Omar Aziz, Nick Carroll & John Creedy
  • Recognising and building on freshman students’ prior knowledge of economics by Michael P. Cameron & Steven Lim
  • Current trends in economics enrolments at secondary and tertiary level by Stephen Agnew
  • Improving the profitability of Waikato dairy farms: Insights from a whole-farm optimisation model by Graeme J. Doole
  • Demographic transition and the real exchange rate in Australia: An empirical investigation by Kamrul Hassan, Ruhul Salim & Harry Bloch
  • Exchange-rate volatility and commodity trade between the USA and Indonesia by Mohsen Bahmani-Oskooee, Hanafiah Harvey & Scott W. Hegerty

2014 NZEP Issue 2 a Special Issue on USM-AUT International Conference on Sustainable Economic Development: Policies and Strategies

The contents of New Zealand Economic Papers, Volume 48, Issue 3, 2014 (available online or by subscription):

  • USM-AUT International Conference on Sustainable Economic Development: Policies and Strategies An introduction to the special issue by Saten Kumar, Rahul Sen & Sougata Poddar
  • Innovative capabilities among SMEs in Malaysian manufacturing: An analysis using firm-level data by Seyed Mehrshad Parvin Hosseini
  • An analysis of the millennium development goal 1: The case of Bangladesh by Mohammad Abdul Hannan Pradhan, Jamalludin Sulaiman & Saidatulakmal Mohd
  • Income convergence dynamics in ASEAN and SAARC blocs by Sakiru Adebola Solarin, Elsadig Musa Ahmed & Jauhari Dahalan
  • Revisiting the institutions–growth nexus in developing countries: The new evidence by Stephen G. Hall & Mahyudin Ahmad
  • Intellectual capital performance and its long-run behavior: The US banking industry case by Sampath Kehelwalatenna & Gamini Premaratne
  • Citation for the award of Distinguished Fellow of the New Zealand Association of Economists
  • Editor-in-Chief signing off by Mark Holmes