In some ways, the number of changes has been less than ideal, as it has the potential to undermine the public’s faith in the policy target. But since these changes have formalised things that we have learned in the process of operating policy, and reflected the underlying goals of the public via the political process, they have been entirely appropriate.
There are several highly-related dimensions of flexibility, and I will now take you through some key developments in New Zealand’s inflation-targeting framework along these dimensions, which are summarised in table 1 below. 12 See for example Svensson (1997).