Despite interest rates coming down, New Zealand’s economy is being pushed further into recession by government austerity measures. Basic macro-economic analysis shows why.
Articles on Phillips curve
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Put to the test in the past two years, the idea of a “natural” rate of unemployment has failed. There’s no need to push unemployment up to any particular rate to bring down inflation.
Some commentary suggests a causal relationship between hiking interest rates and unemployment increasing. It’s not quite that simple, but the days of record high employment are probably numbered.
Debate is raging about whether the recent burst of inflation is temporary or here to stay.
Top contributors
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Professor, School of Economics, The University of Queensland
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Professor of International Economics and Economic Policy, Queen Mary University of London
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Professor of Economics, University of Waikato
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Visiting Scholar, School of History, Philosophy, Political Science and International Relations, Te Herenga Waka — Victoria University of Wellington