Thursday 09 Apr 2020 | 08:32 | SYDNEY
Thursday 09 Apr 2020 | 08:32 | SYDNEY

Oil prices revive the tyranny of distance


Sam Roggeveen


19 June 2008 10:36

The Economist's Free Exchange blog has had a couple of posts in recent days on New Zealand's apparent slide into recession. Their conclusion is that Australia and New Zealand will have to rely on markets physically closer to us if we are to overcome the higher costs of transporting our goods to faraway markets (and getting foreign goods to us). This was an interesting quote, from a new OECD Working Paper:

...relative to the average OECD country, the cost of remoteness for countries such as Australia and New Zealand could be as high as 10% of GDP. Conversely, the benefit for centrally-located countries like Belgium and the Netherlands could be around 6-7%.

If it's going to be harder for us to trade with the world, that seems to strengthen the case for improving the way we trade with each other. Could Australia-New Zealand monetary union come back on the political agenda?