Testing stabilisation policy limits in a small open economy

"Macroeconomic policies in New Zealand have achieved considerable success in meeting their objectives over the past decade, positively contributing to broader economic stability and growth. However, there have at times been periods of significant external imbalance and variability in the NZ dollar, placing stresses on the externally exposed sectors of the economy. It remains an open question whether greater external balance and smaller swings in the exchange rate can be achieved while maintaining or enhancing overall economic prospects through the application of alternative policies or policy strategies"--rbnz.govt.nz