Beneath the obvious policy differences between Labour and National lies a tacit consensus on fundamental economic settings. Until that changes, political choice will be constrained.
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Articles on monetarism
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Raising rates to fight inflation involves a time lag so current efforts to bring down prices won’t start having an impact until the next election is approaching.
The best way to manage the economy is though an array of tools. Interest rates are just one.
While central banks did help mitigate a COVID-induced recession, they don’t have the power to solve our inflation problem.
Creating lots of new money is supposed to produce runaway inflation. The longer that it doesn’t happen, the more this branch of economics appears to have a point.
Top contributors
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Paul Whiteley is a Friend of The Conversation.Professor, Department of Government, University of Essex
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Senior Teaching Fellow in Economics, Lancaster University
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Professor, School of Political Studies, L’Université d’Ottawa/University of Ottawa
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Adjunct Associate Professor, Torrens University Australia
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Lecturer in Politics, Massey University
