RBNZ welcomes University of Auckland academic

Business School Professor Prasanna Gai has been appointed to the Reserve Bank’s Monetary Policy Committee (MPC), placing him at the heart of the country’s economic decision-making and underscoring the value academic expertise can bring to national policy.

Professor Gai, who’s the Head of the Departments of Economics, Accounting and Finance, and Property, was appointed by the Minister of Finance, Nicola Willis, on the recommendation of the RBNZ’s Board.

Another new member, Carl Hansen, was also appointed to the seven-person Committee, which is responsible for the monetary policy decisions needed to support price stability.

Professor Gai says taking on the position is a great honour and an opportunity.

“The current macroeconomic outlook, both in New Zealand and globally, is a particularly challenging and fast-moving one. So, this is an opportunity to form a bridge between practical policy issues and the insights that rigorous academic research can bring,” he says.

“A key takeaway from macroeconomic theory and recent events is that public expectations of inflation cannot be taken for granted—they depend on how, in the face of genuine uncertainty, the MPC responds to events that push the outlook for inflation away from target.

“Anchoring these expectations and ensuring that households, businesses and financial markets properly understand the MPC’s responses is central to restoring price stability.”

Gai also sees the appointment as an opportunity to advance economics and finance education.

“The University of Auckland is home to the best research and training in these disciplines within Aotearoa, and I hope to bring that to wider public attention.”

RBNZ Board chair Neil Quigley and Governor Adrien Orr are delighted to welcome the two new members to the Monetary Policy Committee.

“We look forward to working with Carl and Prasanna very soon,” says Orr.

“The MPC remains laser-focused on its job to control inflation, and Carl and Prasanna will play an important part in our discussions.”