March 2009 Reserve Bank Bulletin released

Release date
26 March 2009

The Reserve Bank today released the March 2009 issue of the Reserve Bank of New Zealand Bulletin.

The first article discusses the financial vulnerability in the household sector. Between 2001 and 2008, aggregate household debt more than doubled, alongside similarly rapid increases in house prices. Now with house prices falling and the economy weakening, questions arise about the risk of households being unable to meet their debt obligations.

The second article is an interview with Eric Leeper, Professor of Economics at Indiana University. The interview covers Professor Leeper's work on the modelling of fiscal policy and its interaction with monetary policy, how fiscal policy could be enhanced by making it more transparent, and the progress of fiscal and monetary policymakers so far in handling the current financial and economic crisis.

The Reserve Bank's annual review of trends in the use of banknotes and coins is discussed in the third article. Last year, there was an unusual increase in issuance of $50 and $100 notes late in 2008, associated with public nervousness about the state of the financial sector. The article also discusses the physical quality of our banknotes, and the rate of counterfeiting in New Zealand.

The fourth article presents an overview of a recent workshop held at the Reserve Bank on technical advances in the forecasting of current or near-term economic conditions.

Finally, the edition includes a reprint of the paper for a speech delivered by Governor Alan Bollard in January 2009, discussing New Zealand's responses to the current economic and financial crisis.

For further information contact
Anthea Black
External Communications Adviser
Ph 04 471 3767, 021 222 5225, anthea.black@rbnz.govt.nz