Two excellent Reserve Bank appointments

Nicola Willis announced:

Economists Carl Hansen and Professor Prasanna Gai have been appointed to the Reserve Bank Monetary Policy Committee, Finance Minister Nicola Willis announced today.

The Monetary Policy Committee (MPC) is the independent decision-making body that sets the Official Cash Rate which determines interest rates. 

Carl Hansen, the executive director of Capital Strategic Advisors, replaces Peter Harris who retires from the MPC at the end of March. 

Professor Gai, the Professor of Macroeconomics at the University of Auckland and Head of the Departments of Economics, Accounting & Finance, and Property, replaces Caroline Saunders who is retiring at the end of June. 

Nicola Willis says Carl Hansen and Professor Gai are both highly-qualified and have been appointed on the recommendation of the Reserve Bank’s board on the basis of their professional knowledge, skills and experience, including in the areas of economics and monetary policy.

Two excellent appointments. I don’t know Professor Gai but he has excellent pedigree – a PhD from Oxford, 13 years at the Bank of England, a stint Advising the Bank of Canada and a monetary policy reviewer for the RBNZ.

I do know Carl Hansen. He was a very highly regarded Chief Executive of the Electricity Authority, but also has previously worked for the Reserve Bank for six years, where he worked on liquidity management policy and macroeconomic modelling.

It might seem a no brainer to be appointing people with monetary policy experience to the Monetary Policy Committee, but this has not been the case in the past.