It can not be good for our economic growth, or for the employment prospects of many of our young people, that, according to an OECD report released in April 1998, nearly half of the workforce in New Zealand 9 can not read well enough to work effectively in the modern economy.
I will argue that under some conditions the central bank can regain control of private expectations without necessarily changing interest rates, but by being visibly and credibly “alert”, explaining and stressing its commitment to maintaining inflation at levels consistent with the price stability objective.