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Monetary policy and operating procedures in New Zealand


  • Michael Dotsey


The Reserve Bank of New Zealand operates in a highly deregulated financial environment which lacks any interest rate regulation or reserve requirements. Yet the Reserve Bank has been able to implement effective monetary policy through a quantity-based procedure. This article analyzes the operating procedures of the Reserve Bank of New Zealand and the relatively small financial costs imposed by these procedures.

Suggested Citation

  • Michael Dotsey, 1991. "Monetary policy and operating procedures in New Zealand," Economic Review, Federal Reserve Bank of Richmond, issue Sep, pages 13-19.
  • Handle: RePEc:fip:fedrer:y:1991:i:sep:p:13-19:n:v.77no.5

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    References listed on IDEAS

    1. Fama, Eugene F., 1980. "Banking in the theory of finance," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 39-57, January.
    2. Fama, Eugene F., 1983. "Financial intermediation and price level control," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 7-28.
    3. Edward L. Whalen, 1966. "A Rationalization of the Precautionary Demand for Cash," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 314-324.
    4. Tsiang, S C, 1969. "The Precautionary Demand for Money: An Inventory Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 77(1), pages 99-117, Jan./Feb..
    5. William Poole, 1968. "Commercial Bank Reserve Management In A Stochastic Model: Implications For Monetary Policy," Journal of Finance, American Finance Association, vol. 23(5), pages 769-791, December.
    6. Sprenkle, C M & Miller, M H, 1980. "The Precautionary Demand for Narrow and Broad Money," Economica, London School of Economics and Political Science, vol. 47(188), pages 407-421, November.
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    Cited by:

    1. Huberto M. Ennis & John A. Weinberg, 2007. "Interest on reserves and daylight credit," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 111-142.
    2. Bech, Morten & Keister, Todd, 2017. "Liquidity regulation and the implementation of monetary policy," Journal of Monetary Economics, Elsevier, vol. 92(C), pages 64-77.
    3. Edward J. Stevens, 1992. "Comparing central banks' rulebooks," Economic Commentary, Federal Reserve Bank of Cleveland, issue Q, pages 2-15.

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    Monetary policy ; Banks and banking; Central;


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