More than 30 years ago, some relatively youthful central bank and Treasury economists in New Zealand were grappling with how to bring two decades of double-digit inflation under control in an economy less than 1% the size of its U.S. counterpart.
What if, they asked, they just told everyone the rate should be much lower - say roughly 2% - and then aim for that?
In fact, Arthur Grimes, a former chief economist and senior official at the RBNZ who was seen as one of the key architects of the policy, would like the target to include a lower range. "It wasn't the most scientific process in the entire world ... we had limited resource. Nobody had done this before us," he added.
Since that time, the target has been shifted twice, initially to a range of 0% to 3% and then in 2002 to the 1%-3% range.Governments had engaged in spending sprees to win votes at the expense of inflation. Douglas, the former finance minister, asked the central bank and Treasury to pioneer the policy to prevent that from happening again.
New Zealand faced rising unemployment, with wages failing to keep up with the cost of living. Reuters reported in 1994 that 13 protesters were dragged from the foyer of the RBNZ in Wellington and arrested after demanding the central bank let inflation rise.
Argentina Últimas Noticias, Argentina Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Heavy Rain in New Zealand’s Biggest City Leads to State of EmergencyNew Zealand’s largest city declared a state of emergency after heavy rain inundated large areas and forced the closure of Auckland International Airport, where one aircraft had hit and damaged runway lights while landing.
Leer más »
Three dead as torrential rain causes disastrous flooding in New Zealand | CNNThree people have died and at least one person is missing as a result of torrential rain that has caused major flooding and numerous evacuations in New Zealand, Prime Minister Chris Hipkins said Saturday.
Leer más »
3 dead, 1 missing as rain pounds New Zealand’s largest cityFriday was the wettest day ever recorded in Auckland, according to weather agencies, as the amount of rain that would typically fall over the entire summer hit in a single day.
Leer más »
3 dead, 1 missing as rain pounds New Zealand's largest cityAuthorities said three people were dead and at least one missing as record levels of rainfall pounded New Zealand's largest city, causing widespread disruption.
Leer más »
3 dead, 1 missing as rain pounds New Zealand's largest cityAuthorities said three people were dead and at least one missing as record levels of rainfall pounded New Zealand’s largest city, causing widespread disruption.
Leer más »