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Inflation targeting and switch of fiscal regime in New Zealand

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Monetary policy cannot be adequately addressed without also specifying fiscal policy. I interpret the economic reforms in New Zealand in the 1980s using a simple model that includes reaction functions of both monetary and fiscal policy. The interpretation is based on the wealth effects of the government debt. The successful and sustainable shift in monetary policy regime in New Zealand was supported by a compatible switch in fiscal policy.
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Document Type: Research Article

Affiliations: School of Economics and Business University of Maribor Razlagova 20 2000 Maribor Slovenia, Email: [email protected]

Publication date: 01 February 2004

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