, Columnist
The Central Bank That Owns a Recession
New Zealand’s slump follows a rapid climb in rates. The lessons should resonate far beyond its shores.
Clouds are gathering.
Photographer: Brendon O'Hagan/BloombergThis article is for subscribers only.
Do central banks have to snuff out growth to do their job?
The question isn’t a new one, but it’s about to get more attention. New Zealand, a tiny place with a big role in economic history because of its early deployment of inflation targets, has skidded into recession. More countries are bound to follow, with uncomfortable scrutiny falling on policymakers. Everyone wants inflation to come down. Few are impressed with the bill when it does.