Money and Finance

BERL's ongoing case against inflation targeting as the sole legislated mandate of the Reserve Bank (RB) is gaining traction.  Trevor Mallard signalled today that there may be a change in the way that the RB fights inflation as noted in a Dominion Post article.  The first chink we have seen in the policy targets agreement's titanium-plated armor.  For a lay-persons overview of BERLs case, the Otago Daily Times has run an opinion »»

Marlborough Federated Farmers made a strong submission in 2007 to the Finance and Expenditure Select Committee inquiry into the operation of monetary policy.  They are extremely concerned at its impact on the health and survival of the sheep and cattle industries. Kel Sanderson accepted the invitation of Chairman Geoff Evans to give a presentation to the Marlborough Federated Farmers AGM in Blenheim 2 May 2008.  This was based on the »»

The current situation reinforces our story.  Remember, the world is in the midst of a financial and credit crises, and signs that the next year or so will see a sustained period of sub-potential economic performance by New Zealand.  Meanwhile, the Reserve Bank is stuck with its mandate that the primary target is inflation and, first and foremost, inflation risks are to be mitigated.  Thus, our monetary framework is rendered »»

At the last review, on January 24, the RBNZ left its OCR unchanged at 8.25% in spite of a currently tight labour market, high returns for dairy products and likely fiscal expansion in the next budget.  In a later speech, Dr Bollard drew attention to likely “shocks” of various kinds on the New Zealand inflationary situation.  While noting the economy’s past ability to handle them, the fact that “shocks” »»

Yes, inflation is an evil.  And, yes, monetary policy is an appropriate tool to combat inflation.  But there are also costs incurred in securing a tight leash on inflation.  The psychotic fear of inflation is clouding the need to pursue more important economic goals.  Indeed, New Zealand’s attitudes to inflation control are actively hindering progress towards other goals. In our submission to the Inquiry into the »»