Academic journal article The Reserve Bank of New Zealand Bulletin

Editor's Note

Academic journal article The Reserve Bank of New Zealand Bulletin

Editor's Note

Article excerpt

Our final issue of the Bulletin for 2011 features three articles.

In the first article Emmanuel de Veirman and Michael Reddell look at consumption spending. More than 80 percent of all the income earned in New Zealand each year is spent on consumption of goods and services, most of that by the private sector. Fluctuations in consumer spending can matter a lot for pressure on resources, one of the main influences on monetary policy decisions. The article outlines some factors that are often thought to influence consumer spending, and takes a preliminary look at the New Zealand data for the last decade in particular. The very large rise in house prices may have had less of an influence on total consumer spending than is often thought.

David Hargreaves and Elizabeth Watson focus on the highly topical issue of financial crises. In particular, they look at some of the international literature on other countries' experiences over past decades and then reflect on New Zealand's vulnerabilities in light of that experience. The literature suggests that, if offshore funding dries up, countries can be particularly vulnerable if their debt (public or private) is denominated in foreign currency or if the country is part of a fixed exchange rate arrangement. …

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