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2007-08 oil shock caused "substantial" decline in New Zealand's GDP say Reserve Bank economists

Submitted by Denis Tegg on 24 June 2011 - 5:24pm | Blog entry

re-posted from my blog - oilshockhorrorprobe

In a recent report, two New Zealand Reserve Bank economists have estimated the real effects of oil price shocks on New Zealand’s GDP. The economists conclude -- » Read more

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Joining the dots ... finally

Submitted by Denis Tegg on 25 February 2011 - 12:19pm | updated 25 Feb 2011 | Blog entry

Suddenly the world's media is awash with concern that the recent rise in oil prices will stall economic growth worldwide and cause another global recession. Guardian and here BBC Wall Street Journal

Finally, even in New Zealand, Brian Fallow economic commentator for the New Zealand Herald expresses concern about the implications for the New Zealand economy from rapidly rising oil prices.

It has taken the uprising in Libya to finally focus the mind of commentators on the dire effects on the world economy of oil prices. But most of this analysis fails to acknowledge that prices were already rising rapidly well before the uprising is in the Middle East due to accelerating demand in developing nations, as well as in oil producing countries. And that the Libyan crisis and the speculation that has followed is a “fear premium” on the price -- which was already rapidly rising due to fundamentals of supply and demand.

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Ostrich-like Denial Continues

Submitted by Denis Tegg on 16 February 2011 - 10:25am | updated 16 Feb 2011 | Blog entry

In August 2009 I wrote an opinion piece published in the New Zealand Herald - "Country Oblivious to Next Oil Shock". I opined that “the spike in oil prices to US$147 a barrel in 2008 helped trigger the global recession. And soon after a global economic recovery, the inevitable return to triple-digit oil prices will lead the world right back into recession.” Back then the oil price was around US$70 a barrel – today Brent Crude is indeed over US $100 – in triple digit territory. » Read more

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