Archive for October, 2010

The GDP Delusion

October 25, 2010 Leave a comment

Following popular demand, and as discussed at last week’s seminar, we will continue with seminars during the exam period. We will meet again in the engineering school tomorrow (Tuesday) at 7pm to discuss one of economics’ most frequently cited statistics – Gross Domestic Product (GDP).

GDP is often used to measure economic growth and it forms an important part of most courses in economics while also playing an important role in shaping government policy. However, often we accept such ideas without critical examination and without assessing the extent to which it achieves what it is claimed to do.

So in this seminar we will define GDP and show where and how it is applied by economists. But more importantly, we will examine its apparent deficiencies and weaknesses. How is it that in the midst of the current recession, GDP is shown to be rising but that the underlying real-world economic fundamentals continue to deteriorate? Should the concept of GDP be shown to be an empty concept, then the implications and consequences are far reaching for us all. We will discuss what these consequences might be.

Date: Tuesday 26th October

Time: 7:00pm

Location: Engineering 3402

NB: We are in the same room as last week and at the same time. If you are unsure, the Engineering Building is 20 Symonds St. If you walk through the main doors off Symonds St and straight across the hall, room 3402 is to the right.

Look forward to seeing you there for an interesting and challenging evening.

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Time Preference:19th October 7pm – Engineering 3402.

October 17, 2010 Leave a comment

This week’s topic involves one of the most important ideas in economics – and one that is rarely understood. That is, what is the key driver of interest rates? We will see that interest rates depend on the concept known as Time Preference and this implications of this concept are huge.

We are lucky to have this seminar taken by Sean Kimpton, an economics lecturer from AUT who took us through Say’s Law earlier this year.  Sean will integrate illustrate Time Preference with reference to all the ideas we have covered this year. He will also illustrate time preference with reference to taxation.

The degree to which people save is explained by their time preference and this preference is subjective and different for each person and will change over time.  Gene Callahan notes that “Time preference itself is implied by the existence of human action…If we didn’t prefer, all other things being equal, the same satisfaction sooner rather than later, we would never act.”

We will also provide more information about the November seminar being run in Auckland by Professor Fekete which we have mentioned in recent weeks.  Don’t miss the opportunity to listen and learn from another interesting International Economist coming to our shores.

Date: Tuesday 19th October
Time: 7:00pm
Location: Engineering 3402

NB there is a room and time change for this week.  If you are unsure, the Engineering Building is 20 Symonds St.  If you walk through the main doors off Symonds St and straight across the hall, room 3402 is almost directly opposite the entrance.

Look forward to seeing you there.

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Public Choice with Peter Holle-President of Frontier Centre for Public Policy

October 6, 2010 Leave a comment

This week we take a slight detour to look at another branch from our family tree of economics.  That branch is the school of Public Choice and we are thrilled to have leading the discussion Peter Holle, founding President of the Canadian think tank Frontier Centre for Public Policy.

Peter will talk about the theory underlying Public Choice and highlight the implications for public policymakers of this influential school of economics.  Public Choice is a branch of economics that studies the decision-making behaviour of voters, politicians and government officials from the perspective of economic theory. It can be considered as a bridge between economics and political science.

Peter has worked extensively with public sector reform and has provided advisory services to various governments across Canada and the United States.  His publications have appeared in various newspapers and journals including dozens of newspapers, the National Post and the Wall Street Journal. He has a Masters of Business Administration from the University of Wisconsin at Madison.  We are delighted that Peter is able to speak to us during his short visit to New Zealand and we look forward to seeing you on

Tuesday night at 6:30pm.
Date: Tuesday 12 October
Time: 6:30pm
Room: University of Auckland Business School, Owen G Glenn Building, Room 317 (Level 3)

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October 3, 2010 Leave a comment


Tomorrow (Tuesday) at the later time of 6:30pm.

The news today is full of concerns over the state of the world’s economies; in fact these concerns have not subsided for the last three years. This has resulted in many central banks around the world having increased their printing of money, especially so in the United States which has printed hundreds of billions (if not trillions) of US currency. But what theory is advanced for doing this? Can printing bits of paper actually solve an economy’s problems and what are the long-term consequences of such a policy? To help answer these questions we need to examine the often misunderstood economic concepts of inflation and deflation.

In this week’s seminar we set out to better understand these concepts. To do so we must first look at the origins of money and ask some more fundamental questions as to what money actually is. Did the market for money develop naturally or spontaneously or did it require a central authority to mandate its use?

Date: Tuesday 5th October
Time: 6:30pm
Room: University of Auckland Business School, Owen G Glenn Building, Room 317 (Level 3)

Look forward to seeing you then.

Econ Group

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