Interview: How to look through inflation shocks

The Kākā by Bernard Hickey · Feb 26, 2023 · 23m

TLDR: I interviewed Reserve Bank Chief Economist Paul Conway soon after the central bank announced it had decided to go ahead with a 50 basis point hike in the Official Cash Rate to 4.75%, as expected, but also after some had called for a pause to assess the damage from Gabrielle. The full interview is available for all in the podcast above.Conway detailed the Reserve Bank’s initial forecasts that Gabrielle would increase CPI inflation by 0.3% in each of the next two quarters and increase GDP by around 1% in the coming years.We talked about:* the nature of one-off shocks that the Reserve Bank…