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Source: United Nations on Unsplash

New Zealand’s economic rebound in the second half of 2020 is being hailed as a vindication of its COVID-elimination strategy. In the early days of the pandemic, there was a widely-held belief that countries needed to choose between protecting their population’s health and their economy. But have countries with lower infection and death rates seen a larger economic downturn?

Multiple studies from 2020 now suggest the opposite is true. Countries that implemented a strict lockdown early in 2020 as cases began to soar have also recovered faster economically. By contrast according to Our World in Data, those countries that experienced…


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Photo by Artem Labunsky on Unsplash

The latest OECD economic snapshot of New Zealand warned that despite a rebound in the second half of 2020, the economy was not yet on a firm footing. They recommended the government swiftly implement the infrastructure spending component of the COVID-19 response package to underpin the recovery. The reason for the urgency is that delays in spending risk being too late to play a part in the recovery and can actually be detrimental by overheating the economy. …


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Image by Gerd Altmann from Pixabay

Ever since the Global Financial Crisis, the world has experienced low inflation. Despite periodic warnings of inflationary pressures, inflation rates globally have been tracking well below historic averages. Central Banks have deployed loose monetary policy and quantitative easing at an ever-increasing rate to try and inflate global markets and in some cases to avoid outright deflation, but these interventions have been increasingly ineffective.

There have been many theories for the persistently low inflation, from hidden labour market slack to globalisation, but one theory that is gaining increasing attention is the deflationary impact of new technology. Technological advancements, from iPhones to…


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Photo by Patrick Pellegrini on Unsplash

By Professor Christoph Schumacher

Like every economy in the world, the COVID-19 induced lockdown sent the New Zealand economy into a nosedive and during the quarter ending in June, our GDP fell by a record 12.2 percent. However, following on from the largest decline in the history of our country was the largest quarterly GDP increase on record. In Q3 2020, our economy grew by 14 percent which leaves us with a manageable annual growth rate of -2.2 percent.

Although the Q3 values were only released today (17th December), the remarkable recovery doesn’t come as a surprise. Economists traditionally watch…


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Photo by Partha Narasimhan on Unsplash

By Professor Christoph Schumacher

Today, the official September 2020 quarter GDP figures were released. After the substantial drop of GDP values due to the COVID-19 induced lockdown, everybody was anxious to see if and how well the economy is recovering. Early indications are that we were doing better than expected. Instead of travelling overseas, New Zealanders were spending more domestically on housing, renovations, consumer goods or national holidays. Official values suggest that our economy grew by 14 percent during the last quarter. This is a remarkable recovery and slightly better than our GDPLive prediction of 13 percent. Annually, economic growth is at -2.2 percent which again, is less severe than anticipated (we predicted -3.2 percent). Overall, the Q3,2020 figures are encouraging, however, the upturn could be severely impacted by the shortage of stock and supplies that we are currently experiencing.


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Photo by Avery Evans on Unsplash

As New Zealand prepares for the potential of negative interest rates in 2021, the IMF issued an unusually blunt warning in November that the world was in a “global liquidity trap” where monetary policy was having limited effect. Chief economist Gita Gopinath pointed out that low inflation and low growth has persisted despite 97 percent of the advanced economies having policy interest rates below 1 percent and one-fifth of the world with negative rates. …


Large container shipping port
Large container shipping port
Photo by CHUTTERSNAP on Unsplash

There is mounting speculation that 2020 will mark the end of globalisation as we currently know it. Open borders and markets were already under threat even before the pandemic hit, but the COVID-crisis has made it clear that an over-reliance on global supply chains could pose a real threat to domestic resilience and domestic sovereignty.

The decades leading up to the global financial crisis may have been a heyday for globalisation, but post-2008 there has been an increasingly negative perception of its downstream effects. …


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Image: Sven Brandsma on Unsplash.com

Just how quickly the world will recover from the pandemic-created recession is being widely debated. With the virus still raging out of control in much of the world and no clear pathway yet to widespread immunization there is still a lot of uncertainty about whether the recovery will be sharp, a so-called V-shaped recovery, a slower U-shaped, or worse still, a drawn out L-shaped recovery.

New Zealand’s rebound is currently looking V-shaped though it is clear that any recovery will be felt unevenly across the economy. …


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Photo by nrd on Unsplash

New Zealand’s unexpectedly low unemployment rate for the June quarter took almost everyone by surprise. At 4 percent it was well below market and Treasury’s own expectations. But behind the headline unemployment figures was the biggest drop in hours worked since records began 30 years ago.

Globally the collapse in the available hours of work has been a defining feature of the pandemic. Underemployment tends to rise after a recession then gradually recedes. But after the global financial crisis of 2008, underemployment for most developed countries never trended back down to pre-recession levels.

Underemployment represents people who are working fewer…


A young woman working from her home office.
A young woman working from her home office.
Photo by Paige Cody on Unsplash

In pre-pandemic times, working from home (WFH) on a regular basis was a perk enjoyed by a relatively small number of mainly high-paid white-collar workers.

Now that pandemic has required a large portion of the workforce to work from home for weeks or even months at a time, companies and employees are asking if WFH is a viable option indefinitely. At its heart, the remote work debate is about productivity. Many employers have been concerned that without being monitored in an office environment, worker productivity would inevitably decline.

Understanding the impact of remote work on productivity will be essential to…

GDPLive

GDPLive is a world-first real-time GDP forecaster, which uses big data and AI to form estimates of economic activity in NZ. Go to: www.gdplive.net

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