pauldotmMar 3
Why would the reserve bank increase interest rates to combat inflation caused by external events? It punishes borrowers for reasons out of their control #auspol
Show threadMozMar 3

@pauldotm because that is the role of the Reserve Bank defined in legislation. They have one primary task: keep inflation between 2% and 3%.

They can't change tax rates, especially taxes on profits, but they can change interest rates. If they need to lift rates and create a recession to compensate for excessive profits, the government requires them to do that.

NZ broadened the remit, but the right wing narrowed it. So it can be done.

https://www.interest.co.nz/public-policy/125678/finance-minister-nicola-willis-says-flexible-inflation-target-will-be-kept-and

#AusPol

Parliament votes to remove the RBNZ’s employment target

Finance Minister Nicola Willis says flexible inflation target will be kept and a new remit will be issued

interest.co.nz
Show threadpauldotm
@moz obviously the rules should be changed.
Mar 3 at 8:23amWeb
Show threadMozMar 3
@pauldotm I did enjoy the period wen the NZ govt was claiming credit for lower inflation and some media kept asking whether they also wanted credit for the high unemployment and recession.