Applied Economics Workshop

Saturday 21 July 2012 10am-5pm

The University of Auckland Business School Owen G Glenn Building Level 3, Case Room 325 12 Grafton Road Auckland

Presented by

Workshop programme
10am 10.05am 10.15am 10.30am 11am 11.30am 12pm 12.45pm 2pm 3.30pm 3.50pm 4.20pm 4.30pm 4.45pm 5pm Introduction and welcome Basil Sharp (Head of Department) Rhema Vaithianathan (Director of CARE) Nick Tuffley Jonathan Eriksen Ben Gerritsen Lunch Panel debate Ideation Challenge Afternoon tea Presentations and judging MADE Judges feedback Closing remarks Finish

Introduction
The Applied Economics Workshop was born out of a conversation I had earlier this year about student engagement with the economic issues affecting not only New Zealand as a whole but also in our local communities. In particular, we wondered if we could turn this into a two-way relationship. On one hand, we wanted to create the opportunity for students to apply their skills and knowledge to achieve tangible outcomes in society. At the same time, students could learn practical research skills outside the scope of their courses and be inspired by making a difference however little or big in their communities. As the workshop has come to evolve through the past few months, we have tried to bring together a mix of social and commercial insights into the way economics operates in the real world. We also wanted to create a platform for like-minded students and professionals to come together and share their ideas. Most importantly, however, we want participants to walk away from this workshop with broadened perspectives and a desire to contribute to positive change. We hope you come to this workshop with an open mind and curiosity, and leave with more questions than you started with. I would like to express my sincerest gratitude to the team that has turned this idea into a reality and to Rhema for her support and inspiration. And of course, to all the speakers, panellists and judges who have taken the time out of their busy schedules to share their insights with us today. Alice Wang Applied Economics Workshop committee member

About the workshop

This inaugural Applied Economics Workshop will take economics outside the classroom and show participants how economics is being used to impact society. Sponsored by the Department of Economics at The University of Auckland Business School, the workshop is catered toward postgraduate and senior undergraduate students and features prominent speakers from diverse fields, a group activity for participants and a panel debate. This is an excellent opportunity for students to learn more about the impact an economics-centered career can have. Speakers Nick Tuffley will speak on how we can correct New Zealands growing current account deficit and simultaneously achieve a reasonable exchange rate. Jonathan Eriksen will talk about the impact of the Christchurch earthquake. Ben Gerritsen will discuss how to pay for efficient road and rail networks in Auckland. Panel debate topics Whether or not a tax on capital gain is required in New Zealand. The need for greater economic regulation given the current European economic crisis. The impact that greater natural resource mining could have on New Zealands economic prosperity.

The University of Auckland has much to offer postgraduate scholars. As New Zealands leading university* and home to the highest number of A-rated researchers in the country, we can offer you a great environment for study.

in city councils increase spending on public We also host three of the countrys seven National Centres of Research Excellence giving is a quota not goods that improve health. Why our postgraduate students even more opportunities implemented ground-breaking where to work on potentiallyin every city research. an economist
So if youre thinking of postgraduate study, received a copy of Econometrica in which that The University of Auckland invites you to article was published? Economists have shown research us. We offer a top-quality effectsexperience, the long term learning of unemployment on mens plus the chance to discover Auckland City, health and mortality make it ranked third world-wide in the 2011 Mercer a major health Consulting Quality of Living Survey.offer unemployed men risk. Yet why do we not

Rhema Vaithianathan
Founder of MADE [email protected] What inspired me to start MADE I love economics. When I was 14, I read an economics textbook and I was sold on economics. I loved how it combines systematic and rigorous thinking with issues that I really cared about. Ever since then I have had a lovehate relationship with economics. The potential for economics is immense. It has not reached its potential. Almost every medical researcher I have met thinks their research will ultimately relieve pain and suffering. Yet economics offers so much more in its ability for relieving human suffering. The 40 year difference in life expectancy between Japan and Burkino Faso is economics, not medical science. Sadly, so few economists think that their role is to improve the world. I dont blame economists nothing in our current pedagogy has taught us how to change the world. So we resort to writing reports that no one reads, running regressions that no one cares about and proving theorems that no one understands. Some of us who are so moved rage against the dying of the light. Yet it all ends in failure. There has to be a better way. A new field is needed one that I call translational economics. This is a field that takes the ideas of economics and implements it in a real world setting to realise its full potential. Economists have shown that female quotas

health support services to prevent these health ideas that *www.auckland.ac.nz/leadinguniversity could be implemented. In almost every economic **The 2012 fee for PhD students is NZ$5,782 per annum orpaperper have read is a 2012 exchange a tool, policy or US$4,707 I annum (based on 20 April gem of rate of NZ$1.00 = US$0.8139). behaviour change that could make things better. Few of them Rhema Vaithianathan Associate Professor see the light of day.
International students pay New Zealand fees.** Study at a world-ranked university and live in one consequences? of the worlds top cities.These are all simple,
Senior economist, Associate Professor Rhema Vaithianathan, analysed the cost-benefit of the New Zealand National Mental Health De-stigmatisation Programme (Like-Minds programme), one of the first in the world to use public campaigns to counter the stigma associated with mental health. Her research showed that not only does a programme such as Like-Minds provide a good rate of return for a country, but it also improved quality of life for people with mental illness.

Economists like me who try to change the world get frustrated because we think that all we need to do is to point out that a policy was a good / bad idea and it would get taken up / dropped.

I have come to realise that failure to implement good economic policy is not written in the stars, For more information: but that the remedy lies in our hands. We must www.auckland.ac.nz/postgraduate | +64 9 923 1535 Email: [email protected] think like Steve Jobs, who understood that the trick to selling computers is not to think like computer geeks but to think like designers. Similarly, the way to implement economic ideas is not like economic geeks but like social designers. The changes we advocate must be so natural, so beautiful and simple that they must slot into peoples lives the way an iPhone slots into their hand.
www.researchworkswonders.ac.nz

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The idea behind MADE was to get young people to start learning how to be change agents for economic ideas. To change the world one needs to understand the steps of change making how to democratise ideas, how to lead, how to be humble, how to build a team. As I often tell my students, if you want to do something about New Zealanders indifference to poverty or the acceptance of corruption in Africa you need to have learned how to change small things. Learn how to walk before you can run. MADE offers students a chance to crawl. My dream for students is that they make a greater impact on the world than I. Not in a famous, Nobel prize winning, high-flying, jetsetting kind of way. But in a humble, powerful and effective way.

Speakers and judges

Oliver Browne
Oliver Browne is a recent graduate of The University of Auckland with honours degrees in Arts and Engineering. He has since worked in the Department of Economics and at Motu Economic and Public Policy Research. His research involves using simulation models to assess policy interventions in energy and environmental markets. Oliver also tutors the Universitys introductory courses in microeconomics and macroeconomics. In August, Oliver is leaving New Zealand to study for a PhD in Economics at the University of Chicago.

Jonathan Eriksen
Jonathan is the Managing Director of Eriksen & Associates Ltd, New Zealand. He is a registered actuary and an employee benefit consultant with more than 25 years experience. He specialises in superannuation and investment advice to trustees and advises life insurers and investment managers on product design. He is also a past president of New Zealand Society of Actuaries and past chairman of Association of Superannuation Funds of New Zealand. Jonathan has had many years experience advising corporate pension funds of multinationals based in Europe, the United Kingdom and the United States among others. He has personally helped multinationals develop their pension arrangements in Australia, Belgium, Japan, New Zealand, the UK and the US.

Professor Craig Elliffe

Craig has 14 years experience as a tax partner at KPMG and eight years experience as a tax partner at Chapman Tripp. His areas of expertise include taxation consulting in technology and electronic commerce; international tax; restructuring; and crossborder transactions. Craig has also been involved in cross-border royalty, income tax and GST issues. His interests are in information, communication and entertainment, as well as international tax, services and manufacturing.

Professor Prasanna Gai

Prasanna is an academic adviser on financial stability matters for the Bank of England and the Bank of Canada. He was senior adviser at the Bank of England responsible for directing the banks research work on systemic risk and editing the Financial Stability Review. Prasanna has also been a Fellow in Economics at the Research School of Pacific and Asian Studies, Australian National University, a visiting lecturer at the University of Oxford, an academic visitor to the Bank of International Settlements and the Reserve Bank of New Zealand, and a visiting fellow at the Hong Kong Institute of Monetary Research.

Ben Gerritsen
Ben advises public and private sector clients on economic and regulatory policy in infrastructure sectors, focusing on the interplay between public demands for quality infrastructure services and private sector investment opportunities. Ben also works on competition policy cases, providing economic advice and analysis of competition law claims. Ben was awarded a Fulbright Scholarship in 2006 and holds a Master of Public Policy from Georgetown University in Washington, DC. Ben also holds bachelors degrees in Law and Economics from New Zealand. Ben has recently managed projects in the Philippines, Indonesia, Rwanda, Kenya, Tanzania, South Africa, Nicaragua, Trinidad and Tobago and New Zealand.

James Ruddell
James is in his final year of a BA/ LLB(Hons) degree. He is CEO of SavY, a student charity that runs financial literacy workshops in high schools. Last year, 110 workshops were conducted in the Auckland and Waikato regions. He was External Relations Manager of SavY in 2011 and spoke in this capacity at the Financial Literacy Summit organised by the Retirement Commission. He has also represented The University of Auckland at international business case competitions and debating tournaments.

Dr Deborah Shepherd
Deborah is a senior lecturer in the Business Schools Department of Management and International Business. She currently teaches in the postgraduate and executive programmes in the areas of Organisation Change and Development and Professional Development. Deborah is one of the faculty directors of the Spark Vision to Business Programme and was part of the founding team for The ICEHOUSE Business Growth Programmes, where she continues to develop and facilitate the Owner Manager Programme. Deborah has worked as a researcher, consultant, facilitator and experiential trainer with a variety of large companies, SMEs and not-for-profit organisations.

Professor Tim Hazledine (Chair)

Tim joined the Department of Economics in 1992. His specialist teaching interests are industrial organisation, public economics and economic reform in developed and transitional economics. He has taught at Otago, Warwick, Balliol College Oxford, Queens University in Ontario and at the University of British Columbia. Tim also has experience in government and consulting. Over the 1991 to 1992 academic year he held the TD MacDonald Chair in Industrial Economics at the Bureau of Competition Policy, in Ottawa. Tim studied Industrial Organisation at Warwick.

Associate Professor Susan St John

Susans research and teaching interests are focused on public sector and retirement policy issues, including decumulation of savings and annuity issues, tax and poverty issues, and applied macroeconomics. Susan is a co-director of The University of Aucklands Retirement Policy and Research Centre. She taught full-time in the Department of Economics from 1981 to 2011, and is now teaching part-time on public policy and politics. Susan is a member of the editorial board of PensionReforms and a founding member and economics adviser for the Child Poverty Action Group. Susan was also a member of the advisory board for the 2007 Retirement Commissions Review of Retirement Policies in New Zealand.

Dr Christine Woods
Christine is a senior lecturer in Entrepreneurship and Innovation at the Business School. In 2003 she was instrumental, with the Postgraduate Students Association, in establishing the Spark Entrepreneurship Challenge and is now the faculty director of Sparks Vision to Business programme. Christine is also part of the direction team for The ICEHOUSE Business Growth Programmes and facilitates the Owner Manager Programme and the Agribusiness programme. Her consultancy work is with SMEs and family businesses in strategy development, learning and business growth.

Nick Tuffley
Nick was appointed as ASBs chief economist in January 2007. Prior to joining ASB, Nick was the senior economist at Westpac where he worked for seven years, having spent three years at the Reserve Bank before that. Much of his career has been spent analysing and forecasting the New Zealand economy, with a particular focus on monetary policy issues. Nick and his economics teams provide regular commentary on developments in the New Zealand economy through publications and media interviews. Nick studied at the University of Canterbury, graduating with a Master of Commerce in Economics.

Making a Difference with Economics

MADE was established in 2010 by Associate Professor Rhema Vaithianathan in The University of Auckland Business Schools Department of Economics. It is open to senior economics students and recent alumni to help them learn how to take economics from the classroom and into the community. MADE plays a similar role to teaching hospitals in medical schools. Economics is increasingly a practical policy science, which can have a huge impact on peoples lives if correctly deployed. However, current pedagogy struggles to teach economic students these clinical methods. One reason is that there are no natural teaching hospitals where economics students can come face-to-face with real world economic problems. For a practicing economist, the client could be the whole economy or smaller sub-sections such as industries, firms, groups of consumers, markets or communities. Vision MADE aims to empower economics students to make social change through the application of economic principles and analysis. Values Empowerment equipping students with tools to create change through continual learning and reflection. Integrity maintaining respect for professionalism, ethics and objectivity. Ownership a persistent commitment to achieving tangible outcomes. Partnership building synergy with teamwork and collaboration in the pursuit of common goals. Passionately curious a willingness to take initiative and challenge the status quo. Contact For more information on how to get involved, please talk to one of the MADE representatives at the Applied Economics Workshop or email [email protected]

Applied economics and CARE

Applied economics is economics in action, and applied economists are practical people. John Maynard Keynes, the twentieth centurys most influential economist, said we should be humbly useful like dentists. The Centre for Applied Research in Economics (CARE) was founded in 2011 with this vision. Our goal is to improve the prosperity and welfare of all sectors of New Zealand through research projects which translate cutting-edge economics into best-practice solutions to real-world problems. As applied and translational researchers, we translate pure research from the academic frontiers into actionable change. We take frontier research to businesses, government departments or other workplaces, adapt them to messy realities and operationalise them so end-users can integrate them into daily practice. If the first solution doesnt succeed, we refine it. As academics we analyse results rigorously and strive to stay evidence-based and impartial. And we publish our findings: not only in peer-reviewed academic journals, but also through our website, seminars, workshops, media interviews, even social networks. CARE consists of a small hub in the Department of Economics, radiating out through larger networks of multi-disciplinary researchers. We have collaborated with a variety of disciplines from engineering to education. We cover all specialties, from health economics to monetary policy. We often have half a dozen projects on the go trying to find solutions to problems our clients have identified. We work in partnership with clients in public, private and non-governmental organisations here and overseas. The aim of CARE is to unshackle the power of economics to be a force for positive change in the world. Change that is lasting and benefits humanity. Visit: www.business.auckland.ac.nz and search CARE

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Applied Economics Workshop Committee 2012

Augustine Choi
Augustine is in his fifth year of a BCom/ LLB(Hons), majoring in Economics. For Augustine, economics has grown from being the sole commercerelated CIE course offered at school, to a subject truly enjoyed. It is the best of two worlds, combining value-based social science with unflinching mathematics. Augustine feels that most importantly, economics allows students to engage with issues not just of practical importance to the self-interested, but of society generally also. He is hoping this workshop is at least an acknowledgement of this strength. New Zealand as part of a research project for Professor Basil Sharp. He is interested in pursuing a career as part of the tax team at Deloitte starting next year.

Alice Wang
Alice is currently in her fourth year of a conjoint BA/LLB. Studying philosophy and economics during her BA has pulled her toward public policy and economic regulation, and she recently spent a summer working for an international legal and regulatory practice in Auckland and Sydney. Alice is also particularly interested in social entrepreneurship and development, which has taken her to programmes at Zhejiang University in China and more recently to Gadjah Mada University in Indonesia. Alice currently works as a research assistant for Rhema Vaithianathan.

Max Montgomery
Max is in his fourth year of a conjoint BSc/BCom at The University of Auckland. His passion for mathematics has led him to choose majors in Pure Mathematics, Statistics, Economics and Finance. Max is interested in the externalities of banking practices and how regulation can be used to reduce the probability of negative events occurring. Max worked in the Risk Advisory team at KPMG last summer, and is interested in pursuing an actuarial career if his high cricket aspirations are not achieved.

Jennie Yao
Jennie is currently in her third year of a conjoint BCom/LLB, majoring in Economics. She hopes to encourage her fellow economics students to realise that economics is hardly just about diagrams, formulas and figures, but it provides us with a much more powerful apparatus for thinking about our society and issues around us. More importantly, our studies should induce us to do something about these issues. People say economists forecast the movements in society; Jennie believes the most powerful economists dictate how society moves. If you are interested in keeping in touch with us or joining the committee for 2013, please contact Alice Wang at [email protected]

Matthew Scoltock
Matthew is in his fifth year of a BCom/LLB. He has a particular interest in general equilibrium, monetary economics and environmental economics, and spent last summer researching economic growth in