bank has been providing fully funded scholarships to five outstanding economics students at third and fourth year levels. this support is also expected to shift to postgraduate economics programmes as soon as the modalities are agreed between the two institutions. vice chancellor, we are aware that the supplementary funds provided by boz cannot meet all your requisite needs with regard to enhancing your research capacity. i therefore urge you to forge other linkages that promote research. i have in mind the african economic research consortium ( aerc ) whose principle objective is to strengthen local capacity for conducting independent, rigorous inquiry into problems pertinent to the management of economies in sub - saharan africa. aerc was established in 1988 as a public not - for - profit organization devoted to advanced policy research and training in economics. however, it is rare to find zambians utilizing the facilities which are offered by this organization. our hope is that with this information, we will see more papers by unza academicians on the aerc website in the near future. in order to encourage research on local issues by our own researchers, i am contributing an book to the unza library by professor paul collier, the director for the study of african economies at oxford university. the book, “ the bottom billion ” provides an example of the sort of issues which we expect our own authors to be able to elucidate on more clearly from their own experiences. in the book, collier analyses the causes of failure by fifty failed states, pointing to a set of traps that snare these countries. these traps include civil war, a dependence on extraction and export of natural resources, being land - locked, and bad governance. surely our experience with some of these “ traps ” should make us better experienced to explain the issues. this is what we expect of unza. vice chancellor, on our part, we will continue to assist unza as guided by the mou. we are very confident that the support that unza is receiving from partners such as boz will go a long way in furthering academic excellence and uplifting the levels of morale among faculty members. i thank you!

mr sherwin discusses the origins of new zealand ’ s inflation targeting regime and its evolution over the past decade speech by mr murray sherwin, a deputy governor of the reserve bank of new zealand, to the new zealand association of economists conference in rotorua, new zealand on 1 july 1999. a decade ago, during the course of 1989, the new zealand parliament devoted considerable time and intellectual energy to the consideration of the reserve bank of new zealand bill, later to become the reserve bank of new zealand act 1989. that act completely re - wrote the rbnz ’ s charter. the bulk of the act – indeed almost half of its 192 clauses - relates to prudential supervision. while the prudential material is interesting in its own right, i won ’ t be dwelling on it in this address. rather, i will concentrate on the origins of our inflation targeting regime, its evolution, and an assessment of our experience with it over the past decade. the origins of the 1989 act lay primarily with roger douglas. around the middle of 1986, with memories of the 1984 election debacle still deeply etched in his mind, douglas initiated a discussion on means by which monetary policy could be made less susceptible to manipulation for short - term political ends. officials were asked to explore options that might have that effect. not too surprisingly, especially in the light of some of the academic literature then circulating on the subject of the relationship between central bank independence and long - run inflation performance, officials recommended reforms which would confer some degree of operational independence on the reserve bank. the origins of inflation targeting inflation targeting as we now understand that term – with multi - year medium - term targets in an economy with liberalised prices, wages and financial markets – was pioneered in new zealand1. however, it was not an inherent part of the original conception of an independent central bank. rather, its genesis lay in the confluence of two sets of policy priorities in the late 1980 ’ s. our inflation targeting evolved – at times abruptly, at times almost as painfully as having teeth pulled – rather than being delivered fully formed and fully considered from some quasi - academic ivory tower high above the terrace. even before roger douglas had asked for specific proposals to reform the institutional arrangements for monetary policy, the managerialist approach to the public sector and its activities had been coming to the fore in new zealand. specifically, this took the form, later enshrined in the state sector act and the public finance act, of giving public sector managers the