A trans-Tasman comparison
As all central bankers know, interest rate changes take a least one year to impact fully on economic growth, while economic growth, in turn, takes a year as well to filter through to inflation. An implication of these well documented leads and lags in the transmission of policy changes, is that in order to be proactive, the central banks of Australia and New Zealand need to adjust their official cash rates based on expectations of economic growth outcomes one year hence and inflation outcomes
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