Economics & Finance / Macroeconomics / Inflation & Monetary Policy

25 Years of Inflation Targeting Failed: New Zealand's Shocking Evidence

Olivier Coibion, Yuriy Gorodnichenko, Saten Kumar

For 25 years, New Zealand has been the poster child for inflation targeting. But a groundbreaking study reveals a devastating truth: business managers' inflation expectations are completely unanchored. They guess 5% when inflation is 1-2%. Only 12% know the actual target. Most rely on gas prices and shopping trips. This isn't a failure of credibility—it's a failure of communication. Discover why even the best central bank policy can't reach the real economy, and what this means for the US and global markets. Based on the research by Dr. Coibion, Gorodnichenko, and Kumar.