Sunday, August 3, 2008
Life on Mars
Reserve Bank Email Service
Date 30 July 2008
Time EMBARGOED TO 4:00PM
Inflation targeting serves NZ well
New Zealand's inflation-targeting framework continues to serve theeconomy well, but we should be careful not to ask too much of it,Reserve Bank Governor Alan Bollard said today.
In a speech titled "Flexibility and the Limits to Inflation Targeting",Dr Bollard said inflation targeting is the best approach New Zealand andmany other similar countries have yet found for monetary policy, among alimited number of viable alternatives.
"Of course, we continue to seek improvements. But overall, and even inthe current very difficult circumstances, the flexible inflationtargeting framework positions us well to manage the ongoing shocksimpacting the New Zealand economy."
Prima facie evidence that the man lives on another planet than most New Zealanders: inflation is 4% and predicted to reach 4.8% in qtr 4.