Looks like I am not the only one unsure about the outcomes of NZRB policy.
https://www.interest.co.nz/news/1103...hat-impact-low
Do low interest rates raise asset prices? hmm tough question to answer Adrian Morron.
per the NZRB
“The overall effect of monetary policy on inequality depends on the strength of each channel, which may reinforce or offset each other. Therefore, the overall effect of monetary policy easing on inequality is indeterminate."
Well we have had 20-30 years of falling interest rates so what has happened to wealth and income inequality in NZ over this time? It would be interesting to know if it has increased, decreased or stayed the same. Even then we can't be sure if interest rates and monetary policy were the reason for any change.
This from Berl
"In March, the Reserve Bank dropped the Official Cash Rate (OCR) from one percent to a record low 0.25 percent. Interest rate cuts at all major lenders have followed. The intention is to maintain confidence in markets. However, this has the potential to have a long term impact on home ownership and wealth inequality."
https://berl.co.nz/our-pro-bono/ineq...nd-new-zealand
I am unsure if BERL is making stuff up or perhaps have some insights or common sense not available to the NZRB.