Various papers have identified shocks to investment as major drivers of output, investment, hours, and interest rates. These investment shocks have been linked to financial frictions because financial markets are instrumental in transforming consumption goods into installed capital. However, the...

This article reports on a policy forum sponsored by the New Zealand Treasury, the Reserve Bank of New Zealand, and Victoria University of Wellington on New Zealand’s macroeconomic imbalances. Chief among these imbalances is New Zealand’s large stock of net foreign liabilities, but there are...

We develop a system that provides model-based forecasts for inflation in Norway. We recursively evaluate quasi out-of-sample forecasts from a large suite of models from 1999 to 2009. The performance of the models are then used to derive quasi real time weights that are used to combine the...

We evaluate the performance of an open economy DSGE-VAR model for New Zealand along both forecasting and policy dimensions. We show that forecasts froma DSGE-VAR and a "vanilla" DSGE model are competitive with, and in some dimensions superrior to, the Reserve Bank of New Zealand's official...

Traditional vector autoregressions derive impulse responses using iterative techniques that may compound specification errors. Local projection techniques are robust to this problem, and Monte Carlo evidence suggests they provide reliable estimates of the true impulse responses. We use local...

The legislative framework for monetary policy has been fairly settled for more than 20 years. This stability contrasts with the frequent revisions that occurred to statutory provisions dealing with monetary policy objectives and the relationship between the Reserve Bank and the government in the...

In this article we examine whether New Zealand having its own currency leads to higher interest rates in New Zealand when compared to Australia or the United States.

We develop a system that provides model-based forecasts for inflation in Norway. Forecasts are recursively evaluated from 1999 to 2008. The performance of the models over this period is then used to derive weights that are used to combine the forecasts. Our results indicate that model...

Real Business Cycle (RBC) and Dynamic Stochastic General Equilibrium (DSGE) methods have become essential components of the macroeconomist’s toolkit. This literature review stresses recently developed techniques for computation and inference, providing a supplement to the Romer (2006)...

In December 2009 the Reserve Bank of New Zealand, in conjunction with Northwestern University’s Centre for International Economics and Development (CIED), hosted a monetary policy conference to mark the 20th anniversary of the Reserve Bank of New Zealand Act. Passed in December 1989, the Act...