Testing stabilisation policy limits in a small open economy: proceedings from a macroeconomic policy forum

New Zealand Treasury

Reserve Bank of New Zealand

Macroeconomic policies in New Zealand have achieved considerable success in meeting their objectives over the past decade, positively contributing to broader economic stability and growth. However, there have at times been periods of significant external imbalance and variability in the NZ dollar, placing stresses on the externally exposed sectors of the economy. It remains an open question whether greater external balance and smaller swings in the exchange rate can be achieved while maintaining or enhancing overall economic prospects through the application of alternative policies or policy strategies.

To examine this broad policy issue, the RBNZ and The Treasury held a conference in June 2006 with contributions from international and domestic policy experts. The proceedings of this conference have been made into a book. Download the complete volume (PDF 2.5MB). Individual contributions are below.

Summary of the proceedings

Testing stabilisation policy limits in a small open economy: Editors' summary of a macroeconomic policy forum (PDF 89KB)

Bob Buckle, The Treasury

Aaron Drew, Reserve Bank of New Zealand

Main papers

Macroeconomic policy challenges: monetary policy (PDF 299KB)

Stephen Grenville, Lowy Institute

Discussion by Christopher Allsopp, University of Oxford

Stabilisation policy in New Zealand: Counting your blessings, one by one (PDF 521KB)

Willem Buiter, London School of Economics

Discussion by Pierre Siklos, Wilfred Laurier University

New Zealand's monetary and exchange-rate policy in international comparison (PDF 1.9MB)

Klaus Schmidt-Hebbel, Central Bank of Chile

Discussion by John Edwards, HSBC

External imbalances in New Zealand (PDF 422KB)

Sebastian Edwards, University of California, Los Angeles

Discussion by William Cline, Institute for International Economics

Panellist comments on the proceedings

Comments on the macroeconomic policy forum (PDF80KB)

Val Koromzay, Organisation for Economic Co-operation and Development

Stephen Dunaway, International Monetary Fund

John McDermott, Victoria University of Wellington