Good luck or good policy? A recent macroeconomic history of New Zealand

Date
2022-06-29
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Source Title
The Singapore Economic Review
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Electronic ISSN
1793-6837
Publisher
World Scientific Publishing Co. Pte. Ltd.
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Language
English
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Article
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Abstract

The Great Moderation was a global phenomenon marked by stable economic growth and inflation. However, how much monetary policy contributed to its success remained a popular debate in the literature. Answering this question became imperative after the global financial crisis since global conditions became relatively more important than past. I examined the recent macroeconomic history of New Zealand through the lens of a regime-switching structural vector-autoregression model to understand the contributions of domestic monetary policy and global conditions to its macroeconomic stabilization. A small open economy structure is essential to facilitate the identification of structural shocks that spillover from the globe.

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Keywords
Regime-switching SVARs, Small open economy business cycles, Inflation targeting
Citation
Published Version (Please cite this version)