The Reserve Bank looks at wealth distribution – not asset prices

Reserve Bank governor Adrian Orr should not have published incomplete research. (Image: Getty)

Fri, 04 Feb 2022

Is it possible to look at the impact on wealth distribution of cutting interest rates without looking at what happened to asset prices?The Reserve Bank of New Zealand (RBNZ) thinks it can. In an "analytical note" titled "Monetary policy easing and the distribution of wealth in New Zealand", RBNZ researchers Karsten Chipeniuk and Gulnara Nolan said the impact of capital gains "will be investigated in future work".That omission allows them to conclude: "We find that a 50-basis point reduction in the OCR (of...

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