According to Figure 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 the percent change from a year ago of New Zealand’s “core” consumer price index (FRED code: CPGRLE01NZQ659N) beginning in 1970. Was inflation after 1990 lower and more stable than before? Download the data and compute the average and the standard deviation of inflation for: (a) the period through 1989; and (b) the period from 1990 to the present.
Answer to relevant QuestionsFinancial stability is a goal of most central banks. Based on a graph showing the evolution of the European Central Bank’s assets (FRED code: ECBASSETS), how important was this goal for the ECB (a) Before 2007, (b) During ...How did the financial crisis of 2007-2009 alter the appointment process of presidents of the regional Federal Reserve banks?Do you think the members of the ECB’s Governing Council should take formal votes? Why or why not? If they do vote, how do you think the votes should be allocated?Why do you think the statement released after each Federal Open Market Committee meeting retains the same basic structure? When you withdraw cash from your bank’s ATM, what happens to the size of the Fed’s balance sheet? Is there any reason for the Fed to react to your action?
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