Latest / The Kākā by Bernard Hickey
The way we run the economy isn't working
It’s just not working.
We’ve known this for a long time, but we felt it being seared into the body of our political economy all over again yesterday. The Reserve Bank tightened monetary policy to slow economic activity again. It wasn’t a mistake. It hiked the key interest rate in order to reduce jobs and wages growth, as well as investment. All because it has one blunt tool, the Official Cash Rate, and one target, to keep inflation around 2%.
This way of running our economy isn’t a bug. It’s a feature. The RBNZ acted yesterday as it was directed to do by the latest version of the Reserve Bank…
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