ANALYSIS: The spotlight is back on the official cash rate. But how does the RBNZ decide how much to change it, and how do other banks attempt to predict its movements?
‘At its core, setting the OCR is an exercise in economic forecasting.’
Our economy ended the year with a bang. Just before Christmas, we were not only told that the September quarter GDP growth rate was -1% but also that the June quarter growth rate was adjusted downwards from -0.2% to -1.1%. It’s hard to believe that Statistics New Zealand had got it so wrong, but
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