| Popis: |
This paper revises the theoretical basis, econometric technique and structure of the Bank's econometric model of the New Zealand economy. The paper discusses the transmission mechanism through which the monetary policy instrument in the model (the real 90 day interest rate) affects the target variable (inflation). Five simulation experiments are conducted, testing the model's response to a monetary policy loosening, an exchange rate depreciation, a fiscal policy expansion, a negative terms of trade shock, and a positive nominal wage shock. |
