September 2008 Reserve Bank Bulletin released

The Reserve Bank today released the September 2008 issue of the Reserve
Bank of New Zealand Bulletin.

This edition of the Reserve Bank Bulletin is built around the theme of
inflation.

The first article notes that New Zealand's long-serving
inflation-targeting framework has served the country well, and continues
to do so. However, the article also discusses the strength of the
current forces on the economy, and argues that inflation targeting can
only do so much to buffer these forces and promote stability.

The second article discusses how inflation developments overseas over
the past decade have influenced inflation pressures in New Zealand.

The third article reviews the research on why inflation is costly, and
why price stability is therefore important.

The fourth article is an interview with the well-known macroeconomist
Bob Gordon, who offers some interesting insights into how the inflation
process works in modern economies, how macroeconomic research on
inflation has developed, and some of the challenges currently facing
monetary policy.

This edition of the Bulletin also provides an article discussing the
current financial market turmoil's origins in world macroeconomic
dynamics. The very large flows of funds internationally in recent years
have played a key role.

The final article explains credit ratings and their role in the
financial system. Credit ratings are a simple risk measure that can
assist investors to make investment decisions, but also have
limitations. The article highlights some of the key issues that
investors should be aware of when using credit ratings.

You can read the Bulletin at the following link
http://www.rbnz.govt.nz/research/bulletin/