Monthly Archives: October 1997

The Economic Impact Of the Employment Contracts Act

This entry was posted in Labour Studies on by .

Symposium on New Zealand’s Employment Contracts Act 1991, Californian Western International Journal Volume 28, No 1, Fall 1997, p.209-220.

Keywords: Labour Studies;

Introduction

There have been various claims about the economic impact of the New Zealand Employment Contracts Act, 1991 (ECA). For instance in Free to Work: The Liberalisation of New Zealand’s Labour Market, Australian economist Wolfgang Kasper claims that the resulting industrial relations had economic benefits. He concludes “the Employment Contracts Act has substantially enhanced the productivity of labour and capital, output, and employment growth because it has been an essential ingredient in the transformation of New Zealand’s institutional order to greater flexibility and competitiveness”.1

Boom and Bust: Can We Learn from the 1987 Crash?

This entry was posted in Business & Finance, Listener on by .

Listener: 18 October, 1997.

Keywords: Business & Finance;

In the weekend after the sharemarket crash of October 1987 I read every book on financial crashes I could find. Unlike too many advisers and commentators I knew this was “it”. Earlier I had written how the relationship between share prices and company earnings (profits), “the P/E ratio”, was well above historical trends. That meant that the return from investing in shares was from capital gains, not from their earning real income from productive assets. (But it was only afterwards I realized that the earnings being reported by many companies was based on the capital gains they were making out of their share trading, so a true P/E ratio was even more exaggerated than I thought.) The market was being driven by blind greed, feeding the fickle bubble of speculation. When the bubble bursts, prices crash. If history warns that collapses followed such booms, reviewing past experiences might tell about the economic fallout, and even how to avoid future disasters.