New Zealand's Monetary Policy Prioritizes Price Stability Over Immediate Fluctuations
The study looked at how New Zealand's monetary policy has been managed over the past decade. It found that the Reserve Bank has focused more on keeping prices stable than on reacting to current inflation rates. Instead, the Bank looks at future inflation forecasts to guide its decisions. The Bank's policy is more about smoothing out fluctuations rather than making sudden changes. There is no clear evidence that the Bank treats high inflation differently from deflation.