Economist Gareth Morgan says Reserve Bank plans to rein in housing market would be a return to "Muldoonism"
Monday, November 14th 2005, 11:41PM
by The Landlord
A prominent economist believes efforts to rein in the housing market are doomed to fail.
The Reserve Bank and the Government are looking at ways of reducing the impact of housing on inflation. Suggestions include limiting the amount people can borrow, and putting restrictions on investment property.
Economist Gareth Morgan says it would be a return to the Muldoonism of the early 1980s, and he says people will easily find their way around any restrictions.
Gareth Morgan says the suggestions being put forward by the Reserve Bank show a deterioration in the quality of our policy formulation.
Mr Morgan says RBNZ Governor Dr Allan Bollard is getting desperate, after cutting interest rates early last year.
He says that was a big mistake, and the country is paying for it now with higher inflation.
