Would adopting the us dollar have led to improved inflation, output and trade balances, for New Zealand in the 1990s?
Deterministic simulations with the Reserve Bank of New Zealand's core FPS model show how New Zealand's broad macroeconomic environment might have evolved over the 1990s, if a US nominal yield curve and US effective exchange rate movements under a common currency arrangement had been experienced. Relatively looser monetary conditions would have prevailed, and led to modest short-run output gains, greater excess demand pressures, noticeably higher CPI inflation rates over the whole of the 1990s, and less favourable trade balance outcomes, especially for the late 1990s. These macroeconomic outcomes are overall less favourable than those obtained from simulating the equivalent Australian monetary conditions.
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Volume (Year): 38 (2004)
Issue (Month): 1 ()
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- Sharon McCaw & C John McDermott, 2000. "How New Zealand adjusts to macroeconomic shocks: implications for joining a currency area," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 63, pages -, March.
- Andrew Coleman, 1999. "Economic Integration and Monetary Union," Treasury Working Paper Series 99/06, New Zealand Treasury.
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- Aaron Drew & Viv Hall & John McDermott & Robert St. Clair, 2001.
"Would adopting the Australian dollar provide superior monetary policy in New Zealand?,"
Reserve Bank of New Zealand Discussion Paper Series
DP2001/03, Reserve Bank of New Zealand.
- Drew, Aaron & Hall, Viv B. & McDermott, C. John & Clair, Robert St., 2004. "Would adopting the Australian dollar provide superior monetary policy in New Zealand?," Economic Modelling, Elsevier, vol. 21(6), pages 949-964, December.
- Andrew Coleman, 2001. "Three Perspectives on an Australasian Monetary Union," RBA Annual Conference Volume, in: David Gruen & John Simon (ed.), Future Directions for Monetary Policies in East Asia Reserve Bank of Australia.
- David Hargreaves & C John McDermott, 1999. "Issues relating to optimal currency areas: theory and implications for New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, pages -, September.
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