Modelling for monetary policy: the New Zealand experience
AbstractThis article is an edited version of a paper written for the Centre of Central Banking Studies' Chief Economists Workshop in London in May 2006. The article reviews the evolution of modelling at the Reserve Bank of New Zealand from the 1970s to today, focusing on the changing role of inflation expectations. It discusses the impact of theoretical developments on the evolving approach to monetary policy and the models that have been built to support policy. The article highlights the important impact that the Lucas critique has had on both monetary policy, and the Bank's approach to modelling.
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Bibliographic InfoArticle provided by Reserve Bank of New Zealand in its journal Reserve Bank of New Zealand Bulletin.
Volume (Year): 69 (2006)
Issue (Month): (June)
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- Sargent, Thomas J & Wallace, Neil, 1975. ""Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 241-54, April.
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