Having the RBA so close by and experiencing the same sort of shocks, why doesn´t the RBNZ learn more from the RBA to do a better job of managing monetary policy?
In March I wrote “Lessons from Australia” in which I showed this chart, illustrating how much better monetary policy is in Australia.
Now take a look at recent news on the two countries:
WELLINGTON, New Zealand—The New Zealand dollar fell Wednesday after the country’s central bank said it may intervene to weaken it, but the bank’s plan to continue raising interest rates will make engineering a decline in the currency a challenge over the long term.
Australian employers boosted payrolls in April, underscoring an improving economic outlook that prompted the central bank to adopt a neutral policy stance.
Central bank Governor Glenn Stevensreduced the benchmark interest rate by 2.25 percentage points from late 2011 to August to a record-low 2.5 percent, and has signaled a period of steady borrowing costs. The jobs data and a stronger housing market indicate businesses are beginning to invest in an economy that policy makers predict will accelerate.
Is the differential performance of the two countries surprising?