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New Zealand's macroeconomic imbalances — causes and remedies

This 2011 workshop discussed the reasons for New Zealand's macroeconomic and financial imbalances, and the associated economic vulnerabilities.

Past Event
Intercontinental Hotel

The New Zealand Treasury, in conjunction with the Reserve Bank of New Zealand and Victoria University of Wellington, held a high-level policy forum in June 2011. 

We commissioned a limited number of eminent policy researchers to review aspects of New Zealand's economic performance and policy regime. Their papers formed the centrepiece of the forum, which also involved key public and private sector researchers, decision-makers and policy advisers.

The papers are available on The Treasury website

This forum was built on and linked to the policy forum we jointly hosted with The Treasury in 2006.

Read about the macro policy forum

The main focus of the forum was on New Zealand's key external and internal imbalances. The papers explored the following issues:

  • understanding the reasons for New Zealand's macroeconomic and financial imbalances, and the associated economic vulnerabilities
  • exploring whether different fiscal, monetary, structural or exchange rate policies and frameworks might help unwind, or manage, the imbalances and/or improve cyclical performance.

Welcome and opening comments
Gabriel Makhlouf, Acting Secretary, The Treasury New Zealand

Programme for Thursday 23 June

Session 1

Session chair: Tim Hampton (The Treasury, New Zealand)

Keynote address: New Zealand and the Woody Allen Syndrome
Presented by: Sebastian Edwards (Professor International Business Economics, University of California)
Discussant: John McDermott (Reserve Bank of New Zealand)

Session 2

Session chair: Tony Richards (Reserve Bank of Australia)

The role of housing in the NZ business cycle and macroeconomic imbalances
Presented by: Peter Jarrett (Head of Division, Country Studies Division 1, OECD)
Discussant: Michael Reddell (Reserve Bank of New Zealand)

Session 3

Session chair: Christie Smith (Reserve Bank of New Zealand)

Understanding New Zealand's macroeconomic fundamentals and vulnerabilities
Presented by: Craig Burnside (Professor of Economics, Duke University)
Discussant: Christoph Thoenissen (Victoria University of Wellington)

Session 4

Session chair: David Hargreaves (Reserve Bank of New Zealand)

The macroprudential policy debate: Implications for New Zealand
Presented by: Prasanna Gai (Professor of Economics, University of Auckland)
Discussant: Toni Gravelle (Deputy Chief Financial Stability Department, Bank of Canada)

Programme for Friday 24 June

Session 5

Session chair: Aaron Drew (New Zealand Superannuation Fund)

Keynote address: External imbalances and macroeconomic policy in New Zealand
Presented by: Philip Lane (Professor International Macroeconomics, Trinity College, Dublin)
Discussant: Norman Gemmell (The Treasury New Zealand)

Session 6

Session chair: Viv Hall (Victoria University of Wellington)

Making fiscal policy more stabilising in the next upturn: Challenges and policy options
Presented by: Anne-Marie Brook (Principal Advisor, The Treasury New Zealand)
Discussant: David Plank (Managing Director, Head of Macro Research and Strategy, Australia/NZ, Deutsche Bank)

Session 7

Session chair: Struan Little (The Treasury, New Zealand)

Discussion panel
Discussant: Brian Easton (Independent scholar and consultant, and Adjunct Professor at the Institute of Public Policy, AUT), Arthur Grimes (Senior Fellow, Motu Economic and Public Policy Research and Adjunct Professor at the University of Waikato), David Gruen (Executive Director (Domestic), Macroeconomic Group, Australian Treasury) and Hoe Ee Khor (Assistant Director, Asia and Pacific Dept, International Monetary Fund)
Closing comments
Geoff Bascand, Government Statistician and Chief Executive of Statistics New Zealand