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Inflation targeting and switch of fiscal regime in New Zealand

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  • Peter Mikek

Abstract

Monetary policy cannot be adequately addressed without also specifying fiscal policy. I interpret the economic reforms in New Zealand in the 1980s using a simple model that includes reaction functions of both monetary and fiscal policy. The interpretation is based on the wealth effects of the government debt. The successful and sustainable shift in monetary policy regime in New Zealand was supported by a compatible switch in fiscal policy.

Suggested Citation

  • Peter Mikek, 2004. "Inflation targeting and switch of fiscal regime in New Zealand," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 165-172.
  • Handle: RePEc:taf:applec:v:36:y:2004:i:2:p:165-172 DOI: 10.1080/0003684042000174056
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    References listed on IDEAS

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    Cited by:

    1. Helder Ferreira de Mendonca & Rubens Teixeira da Silva, 2009. "Fiscal effect from inflation targeting: the Brazilian experience," Applied Economics, Taylor & Francis Journals, vol. 41(7), pages 885-897.

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