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Speaker 1: Kiwi Banks chief economist Jared Kerr reckons the Reserve Bank

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Speaker 1: needs to speed up the rate cuts to cure our

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Speaker 1: sick economy. GDP, as we know, went back zero point

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Speaker 1: two percent in the second quarter of the year, and

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Speaker 1: per capita we went back two point seven percent year

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Speaker 1: on year. Liam dan is The Herald's Business editor at

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Speaker 1: large and with us. Now, Hey, Liam, I'm trying to

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Speaker 1: find the good stuff in this, because there is actually

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Speaker 1: good stuff in this, and the good stuff is it's bad,

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Speaker 1: but not as bad as we thought.

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Speaker 2: Yeah, that's right, you'd think. I mean, this is I

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Speaker 2: feel like we're all pretty down on the economy right now.

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Speaker 2: There was no way we were going to receive this. Well, yeah,

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Speaker 2: the per capita stuff's terrible, but all of it was

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Speaker 2: slightly better than expected. But the response hasn't been a horay,

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Speaker 2: it's better than expected, and I think it's really oh,

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Speaker 2: you know, this is grimm and and well it's.

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Speaker 1: Like it's like being told you're going to get six

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Speaker 1: paddles instead of twelve.

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Speaker 2: Right, yeah, and then of course they doubt that. Actually

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Speaker 2: it was a notch worse than the first quarter. So

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Speaker 2: GDP is a funny thing to count it's a very

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Speaker 2: difficult thing to count, and it often has revisions, so

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Speaker 2: you know, this could be revised down, and you had

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Speaker 2: Olsen saying, well, actually, it could just mean that it's

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Speaker 2: worse than the third quarter, you know, so that you know,

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Speaker 2: look any outside there, well it might be you know.

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Speaker 2: The negative response generally is just that nobody thinks that

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Speaker 2: it's going to be such good news that the Reserve

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Speaker 2: Bank stops cutting interest rates. That's going to keep happening.

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Speaker 2: And then there's a pretty lively debate, as you alluded

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Speaker 2: to with Jared Kerr and a few other people around

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Speaker 2: whether they go fifty base and.

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Speaker 1: They go in fifty what if the feet can do it,

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Speaker 1: why can't Well.

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Speaker 2: Yeah, we still we don't want to forget about inflation.

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Speaker 2: That's you know, yes, it still exists. I think they

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Speaker 2: probably can actually, because I think there's some other things

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Speaker 2: there that suggest that the economy is going to be

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Speaker 2: in for a rough ride for for a lot longer.

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Speaker 2: And that is things like how fast which I think

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Speaker 2: I talked about last week, how fast immigration is coming off,

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Speaker 2: and as soon as you have fewer people coming into

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Speaker 2: the country, it'll solve the per capita GDP problem. Yes,

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Speaker 2: the mass you're not going to No, No, that's right.

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Speaker 1: Tell me, so the triple the triple deprecession is over now,

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Speaker 1: it's just a double deprecession.

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Speaker 2: No, technically, if we're talking about technical recession, where we

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Speaker 2: go two quarters and the economists are saying, everyone's saying,

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Speaker 2: don't worry about that, it's all recessionary. But it's the

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Speaker 2: quarter where in now the third quarter, the reserve banks

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Speaker 2: thinks that will be negative too, so that the quarter

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Speaker 2: in this.

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Speaker 1: One advise the second recession to not be a recession

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Speaker 1: because one of the quarters got lifted up.

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Speaker 2: Again, I've got marginal about zero. I mean, yeah, okay,

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Speaker 2: so that's what I think even the economists are saying.

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Speaker 1: But let's not talk about that because it's technical. The

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Speaker 1: fact of the matter is, would you agree with Jared

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Speaker 1: Kerr that we have basically been in recession for two years?

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Speaker 2: Yeah, it feels like recession. It feels like we've been

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Speaker 2: going backwards for two years. And that's what matters. It's

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Speaker 2: how people feel about about the economy generally.

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Speaker 1: Yeah, you do you want to? I can't believe I'm

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Speaker 1: doing this to you. You heard the huddle, you heard

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Speaker 1: Ali's argument about happiness. Explain to me where you stand

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Speaker 1: on this.

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Speaker 2: Yeah. So she had a point that GDP is and everything,

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Speaker 2: and they have discovered that there's a limit to how

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Speaker 2: happy GDP can make you. So the richest countries in

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Speaker 2: the world aren't necessarily the happiest. Yes, certainly, there aren't

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Speaker 2: many poorer countries. The poorest countries out in the top

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Speaker 2: of that list, but New Zealand ranks very highly. We're

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Speaker 2: up near Switzerland in terms of the happiness index. What

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Speaker 2: happens is that it's just diminishing returns. So if you've

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Speaker 2: got no TV and you get a TV, you're much

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Speaker 2: happier than you were. But if you get if you

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Speaker 2: already have a pretty big TV and you get a

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Speaker 2: slightly bigger TV, it doesn't make you that much happier.

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Speaker 2: At least you're a little bit happier. So there's diminishing

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Speaker 2: returns around happiness, and it really is about the direction

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Speaker 2: of travel. So the US and China right now they

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Speaker 2: start going backwards and they feel very unhappy, even though

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Speaker 2: they're richer than some other countries.

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Speaker 1: Because if you have a TV and then you get

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Speaker 1: a smaller TV, you are not going to be as happy.

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Speaker 2: Well, then you're really unhappy, yeah, or you can't go

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Speaker 2: on holiday this year. So generally we react to the

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Speaker 2: direction of traveling economy and on that basis, the last

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Speaker 2: two years have pretty much sucked for New Zealand.

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Speaker 1: Yes, very unhappy. Thank you for that.

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Speaker 2: Thanks for explaining that to us.

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Speaker 1: Liam appreciated, the Herald's business editor at large.

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Speaker 2: For more from Hither Duplessy Allen Drive, listen live to

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Speaker 2: news talks.

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Speaker 1: It'd be from four pm weekdays, or follow the podcast

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