Commodities, dairy prices and the New Zealand economy
For much of the 20th Century the fortunes of the New Zealand economy were linked to the world commodity markets. As these markets declined through the 1980s and 90s, so too did our competitiveness. Over the last year, the signs are that commodity prices are changing again. This is very good news for the New Zealand economy, offering better terms of trade, higher growth, and a reduced trade deficit. This speech looks at what this might mean for New Zealand, focusing on dairy prices and some consequences for monetary policy.