Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191271
Authors: 
Hayo, Bernd
Neumeier, Florian
Year of Publication: 
2018
Series/Report no.: 
ifo Working Paper No. 266
Abstract: 
Employing unique representative survey data from New Zealand collected in 2016, we study public knowledge about and attitude towards a specific monetary policy institution, the Policy Target Agreement (PTA). The PTA contains the inflation target for the Reserve Bank of New Zealand (RBNZ). First, we assess how much the population knows about the PTA, finding the level of knowledge to be low. Second, we ask whether our respondents support a clause in the PTA that allows the government to over-ride the RBNZ if it deems it necessary. We interpret responses to that question as attitudes towards central bank independence (CBI). The population does not appear to have a clear view on whether or not to expand CBI, as roughly one third supports the overriding clause in the PTA, one third is against it, and one third is unsure. Using logit regression, we study which characteristics make people favour more CBI. Subjective and objective knowledge about the RBNZ and monetary policy increases support for CBI, whereas voting for a national-oriented party and trusting the government reduces it. Policy implications are derived from our findings.
Subjects: 
Central bank independence
public attitude
policy target agreement
economic literacy
New Zealand
monetary policy
household survey
JEL: 
E42
E52
E58
Document Type: 
Working Paper

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