Economists flood in for Capital conference
Thursday, 10 July 2008
Wellington is awash with almost 560 economists and graduate students at a conference celebrating the work of Kiwi genius Bill Phillips and considering topics such as inflation.
Phillips was one of the leading economists of his time and the conference commemorates the publication of a paper he wrote 50 years ago looking at the link between unemployment and inflation - a highly influential idea that became known as the 'Phillips curve'.
The conference turnout is bigger than the 400 delegates expected a month or so ago, with many late arrivals.
'We think the [turnout] is great,' Reserve Bank governor Alan Bollard said. 'It is something that has never happened in New Zealand before. It is a huge thing.'
Dr Bollard will give a speech about Phillips' life and contribution to economics at the conference dinner in Wellington tonight.
The 300 or so conference papers cover a range of subjects, including inflation - a hot topic with the oil price closing in on US$150 (NZ$200) a barrel recently.
Dr Bollard said the questions to come out of the conference papers related to the 'here and now' with a big jump in inflation as happened during the oil shocks of the 1970s.
'Have we learnt any more and how do we react, and do we have markets that act in different ways,' he said.
The issues were on a lot of people's minds.
The price shocks now were 'at least' the size of the 1970s, but the world now had floating exchange rates, central banks controlling interest rates and international movement of capital, which made a difference to responses.
'It will be a very interesting test of the world's monetary policy advances as to whether they carry us through the period without the costs of the 1970s.'
However, when oil prices rose to such heights, the world would suffer, Dr Bollard said.
About 300 New Zealand economists and another 260 from overseas came to the gathering.
Organisers said that including hotel, food and other conference costs, the economists might spend up to $500 a night each. Most of those from other countries were staying a week to 10 days around the two-day conference.
This week an exhibition is on at the Reserve Bank's museum about Phillips, including demonstrations of 'the Moniac' machine.
Built in 1949, the Moniac is a ground-breaking 'inside-out visual' computer-like machine that uses water to show how money moves around the economy.
The concept was way ahead of its time.
There is also a field trip to visit Phillips' family farm in the Wairarapa.
There are 13 key speakers.
The conference began yesterday with speeches by leading international economists Robert Gordon from Northwestern University in the United States and Sir Clive Granger, who won a Nobel prize in 2003.
Kiwi Stephen Turnovsky, a professor of economics at the University of Washington, also spoke yesterday.
Professor Turnovsky is the son of Wellington businessman Fred Turnovsky, a pioneer of the leather industry with his company Tatra.