As Ian Macfarlane, the Governor of the Reserve Bank of Australia, said recently, an alternative way of describing the objective of a central bank committed to safe-guarding price stability is to say that the central bank wants to let the economy “grow as fast as possible without breaking the inflation objective, but no faster”.2 That is exactly how I see the mission of the Reserve Bank of New Zealand.
5  See Canlin Li and Min Wei (2012), “Term Structure Modelling with Supply Factors and the Federal Reserve’s Large Scale Asset Purchase Programs,“ Finance and Economics Discussion Series 2012–37 (Washington: Board of Governors of the Federal Reserve System, May); Arvind Krishnamurthy and Annette VissingJørgensen (2011), “The Effects of Quantitative Easing on Interest Rates: Channels and Implications for Policy (PDF),” Brookings Papers on Economic Activity, Fall, pp.