PHOTO: Jacinda Ardern walks to the parliamentary debating chamber. The prime minister has shown she is willing to try novel strategies. Lynn Grieveson/Newsroom/Getty
Just as it led on inflation, the country has launched a novel attack on rising asset prices
The writer, Morgan Stanley Investment Management’s chief global strategist, is author of ‘The Ten Rules of Successful Nations’ Those Kiwi revolutionaries are at it again. In 1989, New Zealand’s central bank was the first to commit to a specific target for consumer price inflation, then the biggest threat to the world economy. Unions and businesses howled, saying the move would kill growth and jobs.
One property developer called for a rope on which to hang central bank chief Donald Brash. Brash, a former fruit farmer who had seen his uncle’s life savings destroyed by inflation, held firm. By signalling the bank’s seriousness, the target helped to lower the public’s self-fulfilling expectation of endless price rises. Over two years, inflation fell from 8 to 2 per cent. The unpopular idea caught on.
READ MORE VIA FT
- Grand Designs’ ‘modest bach’ gallery
- Abandoned land for sale
- Sacha Baron Cohen goes house hunting in Sydney
- Who will get the Miami mansion? Jennifer Lopez and Alex Rodriguez’s shock breakup
- Team NZ helmsman Peter Burling drops $3.375m on Ponsonby villa
- The 2021 Housing Crash? – WATCH
- Prince Harry and Meghan Markle’s Montecito home was breached by intruder
- New Zealand named in top 10 most expensive countries to buy a house in
- Playboy Mansion sells for over $100million to neighbor, 32
- New Online Platform Set To Disrupt New Zealand’s Property Market