Tagged: RBNZ

LVRs and the Very Serious People - The Dismal Science

Eric Crampton Jul 23, 2015

The Very Serious People understand the political constraints under which policy operates. They often overestimate the bindingness of those constraints, but the rest of us underestimate them. Here's Tyler:I think of it this way: the People are Very Serious if they realize that common sense morality must, to a considerable extent, rule politics. At least if voters are … Read More

RBNZ on Housing - The Dismal Science

Eric Crampton Apr 17, 2015

I knew that Mike Reddell's now being free to blog on monetary policy and the RBNZ was going to be good.Here's Reddell's take on the Deputy Governor's statements on housing.We should expect the Reserve Bank to provide in-depth analysis to back its claims around the housing market.  But in a 19 page speech, only five paragraphs are devoted to … Read More

Reader mailbag: LVR edition - The Dismal Science

Eric Crampton Aug 22, 2013

A loyal reader writes, and I anonymise: My [partner] is a [high ranking title] at [large professional services firm] and over drinks last night the young [professionals in this industry] (under 28, mostly single, still have student loans, gross income btw 60k and 90k, most 2/3 years’ experience max) were crapping themselves re the RB’s loan restrictions…really pissed about it. Read More

Labour on Housing, RBNZ on LVR - The Dismal Science

Eric Crampton Jul 30, 2013

There appears little plausible economic justification for Labour's proposed ban on foreigners' buying houses. Let's take Seamus's logic from yesterday one step further. Recall Seamus's simple model: Consider a very simple model of the New Zealand housing market in which there is a fixed supply of identical houses that will not change over time, and an unchanging demand. Read More

Housing Tradeoffs - The Dismal Science

Eric Crampton Jul 01, 2013

The RBNZ is looking more seriously at loan-to-value ratio regulations to curb house price appreciation. I've been skeptical about LVR regulations. If adopted as a "thou shalt not loan more than x% of the house's value" commandment applying to all new loans, they would have substantial effects on first home buyers unable to lean on family for support. If … Read More

Open Banking Resolution and Deposit Insurance - The Dismal Science

Eric Crampton Apr 12, 2013

New Zealand's Open Banking Resolution system in case of bank failure makes bank failure less likely, and so makes depositor bailouts less likely, but doesn't eliminate the risk that the government might bail out depositors. Matt Nolan has made this point more than a few times and has urged that we reinstate deposit insurance and require banks to … Read More