How to protect New Zealand households from the next recession
ALSO: A benefits system that works for no-one
Summary: A visiting American economist has proposed that, to prepare for the next recession, New Zealand could decide now to create a system of one-off unconditional cash transfers to households. These transfers would be triggered when economic indicators of an upcoming recession – such as falls in consumer spending and rises in unemployment – reach specified levels. The cost of such measures, which would help protect businesses and jobs, could be recouped with taxes levied post-recession. This system could be better organised, more efficient and more “pro-poor”, compared to our government’s hastily created pandemic-era system of Covid wage subsidies.
Photo: Claudia Sahm speaking at the Treasury this week
Wellington this week was treated to an economics lecture that was fascinating but – as far as we can tell – went unreported in the media. The IDEA team, though, was on hand to hear from Claudia Sahm, an American economist who has advised both the Federal Reserve and the White House. One of the rising voices in her profession, she is currently being hosted by the New Zealand Treasury.
Keep reading with a 7-day free trial
Subscribe to Good IDEAs to keep reading this post and get 7 days of free access to the full post archives.