Policy 2014
Economics gets a bad wrap, often unfairly. Labelled as the “dismal science”, critics paint economists as ivory tower researchers, divorced from reality and failing to recognise the human cost of their policies. In the mind of critics, this was evidenced by actions to bail out large businesses in the aftermath of the Global Financial Crisis, or by recommendations of austerity in struggling European economies. Those criticisms laid the foundations for the Occupy movement, which was an unprecedented attack against the 1% who were viewed as holding the rest of society to ransom. For that reason, economics and its “trickle down” theories have been said to prioritise the interests of big business at the expense of the median person.
But such a basic critique of economics is misguided. There are countless examples of properly considered economic policies allowing people at both ends of the income scale to prosper. Think of the reforms of Deng Xiaoping in China, which set the stage for that country to become a world economic superpower. Since his reforms in the late 1970s, average GDP growth of over 10% per year has lifted more than 500 million people from poverty. That number will only grow as Chinese consumers thrive. Economic concepts have tremendous power to improve the welfare of workers and businesses, but only to the extent that they properly understand and manage the underlying political climate.
The goal of these articles will be to highlight the role that economics can play in advancing New Zealand’s prosperity. Part Freakonomics, part The Economist, these articles will analyse contemporary economic issues and their likely impact on New Zealand. A key goal will be to ensure that all of our articles recognise the limitations that personality politics can place on our ideal models of economic behavior. In line with this, we will show that political events like civil war in Syria or uprising in Ukraine can impact the economy as surely as can changes in monetary policy. The overarching idea is to provide readers with a contextual understanding of the global economy and the interplay between politics and economics.
The other key contribution made by the Policy team this year will be a weekly breakdown of all things economics. This will take the form of a short go-to list of recent events, spanning economics and public policy in all its forms. Heading this aspect of the project will be Charles, who is completing his Masters in Economics this year. Charles is heading off to the Reserve Bank next year, so you can be sure that you will be in safe hands as a reader!
But such a basic critique of economics is misguided. There are countless examples of properly considered economic policies allowing people at both ends of the income scale to prosper. Think of the reforms of Deng Xiaoping in China, which set the stage for that country to become a world economic superpower. Since his reforms in the late 1970s, average GDP growth of over 10% per year has lifted more than 500 million people from poverty. That number will only grow as Chinese consumers thrive. Economic concepts have tremendous power to improve the welfare of workers and businesses, but only to the extent that they properly understand and manage the underlying political climate.
The goal of these articles will be to highlight the role that economics can play in advancing New Zealand’s prosperity. Part Freakonomics, part The Economist, these articles will analyse contemporary economic issues and their likely impact on New Zealand. A key goal will be to ensure that all of our articles recognise the limitations that personality politics can place on our ideal models of economic behavior. In line with this, we will show that political events like civil war in Syria or uprising in Ukraine can impact the economy as surely as can changes in monetary policy. The overarching idea is to provide readers with a contextual understanding of the global economy and the interplay between politics and economics.
The other key contribution made by the Policy team this year will be a weekly breakdown of all things economics. This will take the form of a short go-to list of recent events, spanning economics and public policy in all its forms. Heading this aspect of the project will be Charles, who is completing his Masters in Economics this year. Charles is heading off to the Reserve Bank next year, so you can be sure that you will be in safe hands as a reader!