Question
Select two out of the following central banks: Bank of England, Reserve Bank of New Zealand, Bank of Canada, and the Swedish Riksbank. Each of
Select two out of the following central banks: Bank of England, Reserve Bank of New Zealand,
Bank of Canada, and the Swedish Riksbank. Each of these central banks has adopted explicit
'inflation targeting'. For each of your chosen banks, answer the following questions:
(a) What is their target level of inflation and how do theyjustify choosing that level?
(b) What actions did it take following the collapse of Lehman Brothers in September 2008 and
how did it explain these actions?
(c) Did they hit the zero lower bound on nominal interest rates during the global financial
crisis? If so, how could they adjust their inflation target to reduce the likelihood of this
happening again in the future? Check for evidence of a public debate about this issue.
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