New Zealand's experience with changing its inflation target and the impact on inflation expectations
Michelle Lewis and
Christopher McDermott ()
New Zealand Economic Papers, 2016, vol. 50, issue 3, 343-361
We document the experience of the Reserve Bank of New Zealand in changing its inflation target, particularly the effects on inflation expectations. First, the Reserve Bank of New Zealand's dynamic stochastic general equilibrium model is used to highlight expectation formation in the transmission following a change in the inflation target. Second, a Nelson–Siegel model is used to combine a number of inflation expectation surveys into a continuous curve where expectations can be plotted as a function of the forecast horizon. Using estimates of long-run inflation expectations derived from the Nelson–Siegel model, we find that numerical changes in the inflation target result in an immediate change in inflation expectations.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: New Zealand's experience with changing its inflation target and the impact on inflation expectations (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:nzecpp:v:50:y:2016:i:3:p:343-361
Ordering information: This journal article can be ordered from
Access Statistics for this article
New Zealand Economic Papers is currently edited by Gail Pacheco
More articles in New Zealand Economic Papers from Taylor & Francis Journals
Bibliographic data for series maintained by ().