In more recent times, it feels like everything that central banks learnt and practised in those early years has been flipped upside down:   the challenge now is to lift inflation, not bring it down;    interest rates in several countries are negative, not positive;    fiscal stimulus can be welcomed as supporting our monetary policy goals, not criticised as conflicting;    higher wage growth can be greeted as a natural consequence of stimulatory monetary policy, rather than the spectre of a wage-price spiral; and    rising inflation expectations can be seen as a sign of success, not an indicator of failure.
While some of these elements of inflation targeting feel like they have been flipped around, we believe that some core elements of inflation dynamics have remained just the same. In particular, our assessment is that monetary policy is still effective in influencing inflation in New Zealand, through a number of channels.