I must apologise for very rough data, from a graph only moderately well drawn
on a large cardboard sheet used as a speaking tool, without precise coordinates
etc. I seem to have discarded the properly done detail years ago. (The former
means velocity of circulation rose from about 3 to about 8, of course.)
The data show, over a period of, I think, 18 years, a drop of the volume of M1
money from 31% of GNP (as it was called then) to 13%, accompanying an increase in
the consumer price index of from 1-2% to about 15 to 14%. (A bit of a dip at the
end.)
I do not have the time at present to go back to official figures and give you
the basic data in detail, but anyone who considers this rough guide worth
checking should be able to do it from NZ Govt. official statistics, and/or from
Reserve Bank publications. I understand, however, that the R B has quit giving
out regular data on money supply.
I did not consider interest rates, but at the worst of the squeeze, NZ
businesses were paying over 30% for working funds. (New Zealanders are usually
first in the field. Votes for women, climbing Everest, use of cellphones,
getting stuffed up by stupid politicians and then knighting them, etc.)
Bill McG. If you want to make this part of your project when you get round to
it, this might be a very interesting avenue for research.
Regrets for 80% inefficiency in this particular field.
Regards. John R.
NZ; Money supply v
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