Review of New Zealand Monetary Policy

Grimes, Arthur (2001): Review of New Zealand Monetary Policy. Published in: Agenda , Vol. 8, No. 4 (2001): pp. 303-320.

Abstract

In May 2000, Professor Lars Svensson was invited by the then newly-elected New Zealand Minister of Finance ‘to review the way in which New Zealand's monetary policy is conducted and its effectiveness in contributing to broader social and economic objectives’. The report of the Review was published recently (Svensson, 2001). The goal of the review was to examine the legislative framework and the practice of monetary policy after ten years ‘to ensure that the monetary policy framework and the Reserve Bank's operations within that framework are appropriate to the characteristics of the New Zealand economy and best international practice’. This article is devoted to a critique of the theoretical frameworks that lie behind Svensson’s key findings and a review of their application to the matters raised by the terms of reference and Svensson's key findings. Some of the insights raised in the review are applied to current Australian central bank arrangements, in order to contemplate how a review — based on similar approaches — might judge aspects of Reserve Bank of Australia (RBA) performance and governance structures.

• Item Type: MPRA Paper
• Language: English
• Keywords: Monetary policy; Reserve Bank of New Zealand; Reserve Bank of Australia
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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