March 2009 Reserve Bank Bulletin released
The Reserve Bank today released the March 2009 issue of the Reserve Bank
of New Zealand Bulletin.
The first article discusses the financial vulnerability in the household
sector. Between 2001 and 2008, aggregate household debt more than
doubled, alongside similarly rapid increases in house prices. Now with
house prices falling and the economy weakening, questions arise about
the risk of households being unable to meet their debt obligations.
The second article is an interview with Eric Leeper, Professor of
Economics at Indiana University. The interview covers Professor
Leeper's work on the modelling of fiscal policy and its interaction with
monetary policy, how fiscal policy could be enhanced by making it more
transparent, and the progress of fiscal and monetary policymakers so far
in handling the current financial and economic crisis.
The Reserve Bank's annual review of trends in the use of banknotes and
coins is discussed in the third article. Last year, there was an
unusual increase in issuance of $50 and $100 notes late in 2008,
associated with public nervousness about the state of the financial
sector. The article also discusses the physical quality of our
banknotes, and the rate of counterfeiting in New Zealand.
The fourth article presents an overview of a recent workshop held at the
Reserve Bank on technical advances in the forecasting of current or
near-term economic conditions.
Finally, the edition includes a reprint of the paper for a speech
delivered by Governor Alan Bollard in January 2009, discussing New
Zealand's responses to the current economic and financial crisis.
You can read the Bulletin at the following link