Research agenda highlights small economy risks and resilience
The Reserve Bank (RBNZ) has unveiled its updated monetary policy research agenda for 2025-26, outlining six core themes shaped by the recent period of high inflation and ongoing global uncertainty.
Six themes for monetary policy research
RBNZ’s updated monetary policy research agenda centres on inflation; forecasting and modelling; tools, transmission and communication; small open economy macroeconomics; the labour market; and the monetary policy framework, strategy and coordination.
“A large part of our 2025-26 research agenda has been shaped by the recent post-COVID period of high inflation,” RBNZ said in a LinkedIn post.
The central bank aims to “better understand the role of supply shocks and inflation expectations in driving inflation outcomes as well as how monetary policy transmits through the economy.”
RBNZ noted that increasing geopolitical risks and trade restrictions have underscored the need for deeper research into how tariffs and uncertainty affect New Zealand’s economy.
Inflation and house prices in focus
Among the areas of emphasis is inflation, with projects looking at the impact of household and firm expectations on wage and price setting, and new approaches to measuring core inflation.
On forecasting and modelling, the bank will continue to refine its tools to guide decisions, including models of New Zealand house prices and the macroeconomic impacts of climate change.
“Policymakers need to be forward-looking and base their decisions on an outlook of the future that is highly uncertain,” RBNZ said.
Transmission and interest rates
RBNZ also highlighted research into how monetary policy flows through the economy, including the drivers of the neutral interest rate and the role of housing wealth effects.
Other focus areas include the impact of migration and artificial intelligence on labour markets, as well as sectoral employment flows.
Preparing for the 2028 remit review
Looking ahead, the research agenda will help prepare for RBNZ’s next Remit Review in 2028.
“Using macroeconomic structural modelling to explore what optimal monetary policy looks like in a world with increasing external supply shocks will help inform our 2028 Remit Review,” the bank said.
Why it matters for mortgage advisers
For mortgage advisers, RBNZ’s research agenda signals where policy thinking could evolve over the next few years. A sharper focus on inflation dynamics and house price modelling will influence how quickly interest rates fall, directly affecting borrowing costs for clients.
Research into household indebtedness and housing wealth effects could shape RBNZ’s view of serviceability risks, while work on migration and labour markets may feed into housing demand assumptions.
Advisers should be aware that these factors could alter the central bank’s longer-term approach to interest rate settings, credit conditions, and ultimately housing affordability.
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