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Economic Record - 2024 - Kirkby - Impacts of Monetary Policy Shocks on Inflation and Output in New Zealand.pdf (2.55 MB)

Impacts of Monetary Policy Shocks on Inflation and Output in New Zealand*

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posted on 2024-05-06, 03:02 authored by Robert KirkbyRobert Kirkby, Huong Ngoc VuHuong Ngoc Vu
We identify monetary policy shocks in New Zealand as 1-day changes in the whole yield curve around monetary policy announcements. The impacts of these shocks on inflation and output are estimated using functional local projections. We find that the effects of monetary policy shocks are standard in the short run but might be different in the long run. Monetary policy shocks in a small open economy have similar effects as in a large economy, except that unconventional monetary policy announcements have limited impact on long-term interest rates. Accounting for forward guidance, used in New Zealand since 1997, is important.

History

Preferred citation

Kirkby, R. & Vu, H. N. (2024). Impacts of Monetary Policy Shocks on Inflation and Output in New Zealand*. Economic Record. https://doi.org/10.1111/1475-4932.12792

Journal title

Economic Record

Publication date

2024-01-01

Publisher

Wiley

Publication status

Published

Online publication date

2024-02-25

ISSN

0013-0249

eISSN

1475-4932

Language

en

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