representing society's preferences between inflation, output and other dimensions of macroeconomic stability. Within the context of …

Bank to target inflation "over the medium term" rather than over an annual target. This medium term objective shifts … inflation targeting towards a "halfway-house" between inflation targeting and price level targeting. Extending the inflation … averaging horizon to the medium term improves the inflation-output tradeoff by influencing inflation expectations. But how long …

I develop a new estimate of core inflation for New Zealand and Australia based on a dynamic factor model. By using an … innovation allows us to examine the relative contributions of tradable and nontradable prices towards core inflation. The results … show that core inflation in both countries is primarily driven by the nontradable factor. The nontradable factor also …

This paper uses wavelets to develop a core inflation measure for inflation targeting central banks. The analysis is … applied to the case of New Zealand – the country with the longest history of explicit inflation targeting. We compare the …-term trend in inflation. It also has comparable forecasting performance to standard benchmarks. …

New Zealand data show that the inflation-output relationship is asymmetric. This asymmetry implies that positive demand … shocks tend to increase inflation by more than negative demand shocks of similar magnitudes reduce it. An important … implication of this asymmetry is that a monetary authority with the objective of maintaining the inflation rate within a narrow …

This paper introduces a new indicator of core inflation for New Zealand, estimated using a dynamic factor model and … with a wide range of other ‘core inflation’ measures estimated from disaggregate prices, such as the weighted median and … inflation outcomes. The 2 year centred moving average is used as an analytical approximation of the inflation target from the …

correlated with the business cycle, both output and inflation become more variable. However, the output gap is still useful for … stabilising output and inflation. Basing policy actions on the output gap directly and/or indirectly through forecasts of … inflation leads to better macroeconomic stability than basing policy actions solely on currently available observable data such …

This paper reviews the concept of core inflation, focusing on the alternative interpretations of core inflation as the … persistent or generalised element of inflation. The role of a core inflation measure in policy formulation, communication and … inflation. …

suggesting that inflation expectations in New Zealand are moving towards rational expectations. Theory suggests this will make it … easier to control inflation after a temporary disturbance. …

deterioration is less pronounced for rules that use forecasts of inflation rather than just contemporaneous inflation. Under the …