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Conference summary - New Zealand’s macroeconomic imbalances – causes and remedies

Christie Smith

This article reports on a policy forum sponsored by the New Zealand Treasury, the Reserve Bank of New Zealand, and Victoria University of Wellington on New Zealand’s macroeconomic imbalances. Chief among these imbalances is New Zealand’s large stock of net foreign liabilities, but there are also recurrent concerns about high domestic interest rates, the high exchange rate, and about New Zealand’s relatively poor growth performance. The forum highlighted that both private and public sectors contribute to imbalances, and canvassed a wide array of policies that might help reduce the vulnerabilities that these imbalances entail. Such policies include directly improving the government’s net saving, and using policies to influence private sector saving and investment behaviour.