Article: DP2004/06: improving implementation of inflation targeting in New Zealand: an investigation of the Reserve Bank's inflation errors.(Reserve Bank Discussion Papers)(Brief Article)

This paper extends the 'Five Area Bilateral Equilibrium Exchange Rate' (FABEER) model used in Wren-Lewis (2003) to include New Zealand and Australia. This model calculates medium term exchange rates conditional on assumptions for 'sustainable' current accounts. The model suggests that the equilibrium value of both currencies has been ...

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