An Australasian Currency, New Zealand Adopting The Us Dollar, Or An Independent Monetary Policy?
Arguments for and against abandoning independent national currencies and monetary policies have varied considerably over time and by country. For New Zealand, it can be argued that a key driving force behind recent debates has been the conduct of monetary policy and the need for improved overall economic performance in the longer term, rather than major dissatisfaction with its floating exchange rate system. In that context, this paper initially considers some issues considered important by other countries, and factors specific to New Zealand. It then utilises deterministic and stochastic simulation results from the RBNZ's core FPS model, to illustrate what New Zealand's inflation, output and trade outcomes might have been, had it faced US or Australian interest rate and exchange rate movements of the 1990s. The paper concludes with some implications for future research, and some ways forward for New Zealand policy.
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- Viv Hall & Angela Huang, 2003.
"Would Adopting the US Dollar Have Led to Improved Inflation, Output and Trade Balances for New Zealand in the 1990s?,"
03_14, Motu Economic and Public Policy Research.
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- Viv Hall & Angela Huang, 2004. "WOULD ADOPTING THE US DOLLAR HAVE LED TO IMPROVED INFLATION, OUTPUT AND TRADE BALANCES FOR NEW ZEALAND IN THE 1990s?," Macroeconomics 0401001, EconWPA.
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- Yin-Wong Cheung & Jude Yuen, 2004.
"The Suitability of a Greater China Currency Union,"
CESifo Working Paper Series
1192, CESifo Group Munich.
- Arthur Grimes, 2005.
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- Arthur Grimes, 2005. "Regional and Industry Cycles in Australasia: Implications for a Common Currency," Working Papers 05_04, Motu Economic and Public Policy Research.
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- Aaron Drew & Viv Hall & John McDermott & Robert St. Clair, 2001.
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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.
- 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, September.
- Richard Pomfret, 2005. "Currency Areas in Theory and Practice," The Economic Record, The Economic Society of Australia, vol. 81(253), pages 166-176, 06.
- Kam Leong Szeto & Paul Gardiner & Richard Gray & David Hargreaves, 2003. "A Comparison of the NZTM and FPS Models of the New Zealand Economy," Treasury Working Paper Series 03/25, New Zealand Treasury.
- 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, March.
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