The spill-overs from these adjustments and the fiscal and monetary responses to them can be especially challenging in small open economies with stronger growth prospects, and where there are high expectations of what central banks can achieve. The Reserve Bank endeavours to provide an accurate assessment of the implications and challenges of these adjustments for the New Zealand economy.
In doing so, we seek to be clear on what we can and cannot influence, and how government policy instruments and private sector responses can increase our effectiveness.