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Comments on: What is the RBNZ talking about http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/ The Visible Hand in Economics Tue, 31 Jul 2007 03:18:36 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: jameskey http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-107 Tue, 31 Jul 2007 03:18:36 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-107 I agree, we don’t want certain people knowing everything with certainty, especially those damned currecncy traders.

]]> By: Matt Nolan http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-106 Tue, 31 Jul 2007 03:15:30 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-106 I know, and it would also cut back on uncertainty, especially if they released the algorithm that the computer would use. And if they wanted uncertainty they could make it that if we were in a certain range their is some probability the computer would do something, and some probability it wouldn’t

]]> By: jameskey http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-105 Tue, 31 Jul 2007 03:12:27 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-105 July 12, 1979 apparently. Regarding the final sentence, perhaps a computer governing the RBNZ wouldn’t be so bad – think of the commitment potential.

]]> By: jameskey http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-104 Tue, 31 Jul 2007 03:06:46 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-104 I’ve always wondered why schools call them discos even though disco died a long time ago.

]]> By: Matt Nolan http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-103 Tue, 31 Jul 2007 03:01:54 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-103 That is a good point. We used to call them discos in Otorohanga, I guess thats not something to brag about

]]> By: jameskey http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-102 Tue, 31 Jul 2007 02:58:05 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-102 I didn’t know that 14 year old girls went to balls. More like school dances Matt.

]]> By: Matt Nolan http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-101 Tue, 31 Jul 2007 02:52:30 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-101 Thats an interesting point. Ultimately, the reason we want to keep inflation down is so that the negative effects of price instability are minimised. However, in the long run, the rate of inflation is equal to the growth in the money supply. How long this long run is depends on the stickiness of prices, and as a result the growth in the money supply and current inflation can differ.

Fundamentally though, unless this short term activity increases the supply of resources in the long-run (e.g. by facilitating investment) then the growth in the money supply will translate into inflation.

Now in our current monetary system, the jump in the quantity of money being pumped into the system was the result of strong grow in money demand. By increasing interest rates we increase the price of money, reducing the quantity of money demanded. In this case the RBNZ just has a different choice variable, they can control price or quantity, however they want to end up in the same place.

]]> By: Owen http://www.tvhe.co.nz/2007/07/30/what-is-the-rbnz-talking-about/#comment-100 Tue, 31 Jul 2007 01:33:48 +0000 http://tvhe.wordpress.com/2007/07/30/what-is-the-rbnz-talking-about/#comment-100 Or stop worrying about ‘price stability’ and focus on not increasing the money supply by 15% or whatever it has over the last few years, you know, actual inflation.

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