Independent Review of the Operation of Monetary Policy in New Zealand

In May 2000, the Government announced that the New Zealand monetary policy framework would be reviewed. Professor Lars Svensson of Stockholm University was appointed to undertake the review and to report by the end of February 2001. Professor Svensson’s report was released by the Treasurer/Minister of Finance on 28 February.

In this issue of the Bulletin, we have published the Executive Summary and recommendations of the Svensson Report, together with the terms of reference of the review. The complete report by Professor Svensson can be obtained from the New Zealand Treasury and can be accessed on www.monpolreview.govt.nz – the monetary policy review website, and on www.rbnz.govt.nz – the Reserve Bank of New Zealand’s website.

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UK Monetary Policy: Does it Work

The main instrument of UK monetary policy is the use of interest rates, set by the MPC. The theory is that interest rates are very effective in controlling inflationary pressures. The relative success of meeting the government’s inflation target in the past 7 years suggests that this proves the effectiveness of monetary policy.

In brief raising interest rates helps to reduce Aggregate demand in the economy. When interest rates are raised several things are affected. Firstly those with mortgages have higher monthly payments, this reduces their disposable income and reduces their spending. Secondly there is an increased incentive to save money rather than spend. Thirdly those who have other forms of borrowing will be hit with increased interest repayments, it will also discourage people from buying on credit. Therefore in principal raising interest rates will reduce demand and prevent the economy from overheating. This enables inflationary pressures to be subdued.

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Adult Education Centers – How Do You Find Them?

When you need or want to further your education you will need to know where to go to do it. There are many adult education centers that you can do this at. You just need to know what your motivation is for the education. This will help you to be able to complete what you need to do. When you need to know how you can find these centers you can find them in a couple of different ways.

1. You can go online and go to any search engine to find them. You just need to type in “adult education centers” and you will get a whole list of them that you can look through. Some of them will not be suitable for you because they will be too far away from where you live. However, you will be able to narrow down your search by putting the city and state that you live in behind the adult education centers.

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