> Your suggestion, that the economy might be different in 2 years, so it's
> ok to ignore the future and choose a solution with no on-going benefits,
> is rather short-sighted. The economy could be worse in 2 years!
In which case after two years your CEMP will be 2% instead of 1%?
Surely it is better to have a mechanism for slowing housing speculation
which takes affect immediately instead of in a couple of years, giving those
sectors of economy a couple more years of overheating first?
I can understand taking the position that both the OCR and Rob's idea of
CEMP are flawed. I cannot understand the position that the OCR is better
OCR does so much collateral damage to the rest of the economy, particularly
with the amount of forex money chasing interest rates these days, that it
seems a particularly poor instrument to use unless one already has a lowish
OCR and you want to stabilise things. When you already have HIGH OCR it
seems particularly like using a sledgehammer... kill both exporters and the
balance of payments in the hope of maybe eventually slowing the housing
market? (assuming of course that cheaper imports from the rapidly rising
dollar don't completely negate your OCR increase).