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Monetary and Fiscal Policy: How an Agreed Inflation Target Affects Fiscal Policy
Author(s) -
Brash Donald
Publication year - 2011
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/j.1759-3441.2011.00097.x
Subject(s) - inflation (cosmology) , fiscal policy , price of stability , legislation , economics , independence (probability theory) , monetary policy , government (linguistics) , monetary economics , fiscal union , economic policy , macroeconomics , political science , linguistics , statistics , physics , philosophy , mathematics , theoretical physics , law
When the 1989 legislation was passed giving the Reserve Bank of New Zealand a high degree of operational independence, with an overriding responsibility for achieving and maintaining stability in the general level of prices, the extent to which this would inevitably drive change in fiscal policy was not widely understood. It wasn’t long before the Government realised the inevitable inter‐relationship.