New Zealand in the 1970s and 1980s combined high inflation with relatively little central bank independence. In 1989, New Zealand became the first country to adopt an inflation target. How did this policy regime shift affect inflation? Plot the inflation rate based on New Zealand's "core" consumer price index (FRED code: CPGRLE01NZQ659N) beginning in 1970. Was inflation after 1990 lower and more stable than before?

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05-06-2024
Business

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New Zealand in the 1970s and 1980s combined high inflation with relatively little central bank independence. In 1989, New Zealand became the first country to adopt an inflation target. How did this policy regime shift affect inflation? Plot the inflation rate based on New Zealand's "core" consumer price index (FRED code: CPGRLE01NZQ659N) beginning in 1970. Was inflation after 1990 lower and more stable than before?

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