The Kiwi question: Have central banks learned nothing since 2008?

Entering a 'monetary policy arms race'

The kiwi is a small, flightless bird as well as the nickname for the New Zealand dollar, which plunged overnight and caused markets to take flight.

Here, in microcosm, is the challenge we now face: this week, the country saw unemployment fall to an 11-year low, wage growth surge and inflation accelerate to 1.7% and yet the Reserve Bank of New Zealand (RBNZ) cut interest rates half a percentage point to 1%, an all-time record low, citing potential problems 'overseas'. Quickly, the currency fell more than 2%, just as the US formally labelled China a currency manipulator. Surely to goodness we haven't come to this? In the decade post the Global Financial Crisis (GFC), central banks and governments around the globe worked together to...