Professor Robert MacCulloch: The graph that shows how the RBNZ Mistakenly Caused NZ's Worst Slump since 1991 (barring Covid's 2020)

What have we got to know about Reserve Bank of NZ Governor Adrian Orr over the years? He's hot headed, can't take criticism from folks more knowledgeable about economics than himself, gets carried away & overexcited, and is desperate to be in the news. Orr told the country he wanted to "engineer a recession" to stop the inflation he created. Instead he engineered three (Stats NZ data has become as unreliable as the Census since the Chief Statistician / CEO there hasn't has a statistics qualification for over a decade). But there was never a need.

Every other Central Bank in the world stated it wanted to achieve "a soft landing". And they succeeded. In nearly every other country, aside from ours, inflation has come down, although without the ongoing stagnation that has ripped the guts out of NZ. Where's the proof? Look at the graph below. It compares NZ's Official Cash Rate with Australia's. Unlike the Reserve Bank of Australia, the RBNZ hiked rates far higher as it panicked about inflation, and is now panicking & cutting rates lower than Australia due to NZ's stagnation. Although the RBNZ Governor suckered the Main Stream Media, our MPs, the RBNZ Board (which doesn't have clue about monetary policy since Labour stocked it full of its mates) and now his huge Comms / PR / marketing team is trying to sucker the Kiwi public, the graph below tells a thousand words. Australia had no recession these past years. NZ had three. Australia didn't panic when inflation was rising, and didn't panic again as inflation fell. Central Banks are meant to smooth the business cycle, not exacerbate it.

Click to view

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.