1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

The Determinants and Properties of Monetary Conditions

Direct Survey Evidence from New Zealand

In the absence of a generally accepted indicator of monetary conditions the current and expected stance of monetary policy remains undefined. However, the Reserve Bank of New Zealand, by directly surveying perceived and expected monetary conditions, have enabled both a mean index of current and future monetary conditions, as well as a proxy of respondents’ uncertainty, to be generated. The principal determinants and properties of these survey responses are examined in this paper, including whether: central bank announcements dominate economic fundamentals in determining conditions; the responses are consistent over varying time horizons; and the responses are symmetrical to both a tightening and loosening in policy. The determinants of uncertainty regarding the policy-stance are also investigated empirically. The results indicate that: responses to monetary conditions are highly influenced by the recent past; respondents tend to exaggerate the implications of their short-term ...

English

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