graeme wheeler : the global economy, new zealand ’ s economic outlook and the policy targets agreement speech by mr graeme wheeler, governor of the reserve bank of new zealand, to the canterbury employers ’ chamber of commerce, christchurch, 3 february 2016. * * * good morning and thank you for the opportunity to meet with you again, it ’ s a great pleasure to be here. i believe this is the 23rd year in which the reserve bank has been invited to meet with the canterbury employers ’ chamber of commerce and offer some thoughts on the state of the economy. if it is helpful i ’ ll start with a few comments on the global economy, before turning to the domestic economy, the policy targets agreement and the outlook for monetary policy. 1. the global economy last year the global economy hit a soft patch and financial markets have had a rocky start to the current year. global growth, at 3. 1 percent, was the slowest since 2009 despite unprecedented monetary stimulus and falling oil prices. this wasn ’ t the first slowdown since the global financial crisis ( gfc ), although previous episodes have largely occurred in the advanced economies, such as in the eu area in 2012. indeed, the emerging and developing countries, led by china, have delivered a strong growth performance in recent years, accounting for about 80 percent of global growth since 2010 ( measured in purchasing power parity terms ) 1. this pattern began to change in mid - 2014 with weaker trade volumes and slower growth in emerging markets – and especially in china, russia, brazil and south africa. during 2015, foreign net capital outflows from emerging markets totalled usd 735 billion, the majority of which was out of china – the largest amount since 2008 2. growth picked up in the advanced economies – particularly in the us and european union. the slowdown in global growth hasn ’ t been for lack of monetary stimulus by central banks. in the history of the world as we know it, monetary conditions in recent years have never been easier. 3 a particular concern during 2015 was the slow growth ( 2 percent ) in the volume of merchandise trade. since the mid - 1960s there have only been five occasions of weaker trade growth – each was associated with a major slowdown in global gdp growth ( opec1, opec2, asia crisis and us high tech bubble, and the gfc ) 4. the current weakness in trade volumes reflects the sluggish recovery in investment in advanced economies, slower growth in emerging markets, high inventor

in service to society new zealand ’ s revised monetary policy framework and the imperative for institutional change a speech delivered at wharewaka function centre, wellington, new zealand on 29 march 2019 by adrian orr, governor written with omar aziz, economic advisor 2 the terrace, po box 2498, wellington 6140, new zealand telephone 64 4 472 2029 online at www. rbnz. govt. nz introduction tena koutou katoa. thank you for joining us today to discuss new zealand ’ s new monetary policy framework. the recent amendment to the reserve bank ’ s legislation sets up a monetary policy committee that is responsible for a new dual mandate of keeping consumer price inflation low and stable, and supporting maximum sustainable employment. the committee ’ s deliberation process will ensure that all decisions benefit from a diverse range of views, and offer greater transparency and accountability to monetary policy decisionmaking. before i outline the features of the new framework and its underlying principles, i would like to paint the backdrop to this institutional change. the business of central banking is evolving as circumstances change. some of the change is favourable, some is confronting. on the favourable side, we have low and stable inflation, low unemployment, and broad financial stability. this advantageous position must never be taken for granted. i thank all of the wise people – past and present – who have worked hard on creating the current environment. on the challenging side, in addition to maintaining the status quo, we have new and significant long - term economic challenges among which central banks operate. for example, in the financial system alone, we must deal with global economic inter - dependence, dominant financial institutions, significant debt burdens, technological change that challenges employment and financial inclusion norms, climate change, and much more. the list is long and the challenges have intergenerational implications. i spoke about many of these issues in a recent speech about the dangers of short - term thinking. 1 the refreshed reserve bank act and monetary policy practices, and the ongoing reviews of our legislation, position us to adapt to these changes. the aim is to ensure that the reserve bank can continue to achieve its fundamental purpose, which is “ to promote the prosperity and well - being of new zealanders, and contribute to a sustainable and productive economy ”. 2 institutions, legitimacy & identity let ’ s take a step back and talk about the backdrop to recent and pending changes to the reserve bank ’ s frameworks. the key role of a public institution is