A good farm price measure captures the price that a 'representative' farm would sell for each period. In reality, though, there is no representative farm and, even if there was, it would not sell every period anyway. Farms are not like bottles of milk. They are not identical and their prices are...

This note analyses the relationship between actual and expected Official Cash Rate (OCR) changes and subsequent exchange rate movements. It concludes that there has been a weak positive relationship between OCR changes (or expected changes) and the currency, but that this only applies over very...

People's expectations of future house prices appear to be an important influence on house prices and the volume of house sales (Wheaton 1990; Berkovec and Goodman 1996). For example, Case and Shiller (2006) argue that expectations played a role in producing California's house price boom in the late...

We compare the current recovery in the New Zealand economy with the recoveries from the previous two recessions, focusing on the developments in the labour market. By way of comparison, we contrast the New Zealand situation with that of the United States, during its current and previous two...

New Zealand manufacturing activity fell sharply in the 2008/09 recession, and there has been only a modest recovery since then (something seen in other countries too). Exports of (non-primary) manufactured goods have held up relatively well, but domestic production and sales have been weak. Our...

The prices for foreign exchange options allow us to extract information on implied market perceptions of future exchange rate risk. This note illustrates the techniques, looking at the behaviour of the New Zealand dollar over recent years. Our analysis suggests that the behaviour of the NZD/USD...

The exchange rate matters a lot in New Zealand and the Reserve Bank uses several different models, each imprecise, to analyse it. This note focuses on just one of those approaches: the macro-balance model of the exchange rate. We use that model to estimate the exchange rate which, if sustained,...

Operating monetary policy when interest rates are already at or near zero comes with many challenges, as many countries have discovered in recent years. One aspect is that, if effective easing beyond a zero policy rate is desired, the policy rate constrained at zero will no longer conveniently...

Rugby World Cup 2011 kicks off in September 2011. The tournament will be a significant event for New Zealand. The Reserve Bank's main interest is in how the tournament affects domestic economic activity, capacity pressures and New Zealand' national accounts. This article aims to outline the...