“The Role of Expectations in Changed Inflation Dynamics,” Finance and Economics Discussion Series 2018-062. Washington: Board of Governors of the Federal Reserve System, August, https://www.federalreserve.gov/econres/feds/files/2018062pap.pdf. Powell, Jerome H. (2018).
Having said that, he concludes that, despite Alan Greenspan’s term of “conundrum”, this has not significantly constrained their ability to influence domestic financial conditions. This is more problematic for a number of small open economies with higher interest rates – not only New Zealand, but also Iceland, Hungary, Australia and South Africa.