A speech written for the Otago Chamber of Commerce in Dunedin by Governor Graeme Wheeler, delivered by Assistant Governor John McDermott. I will discuss some of the main challenges confronting central banks in conducting monetary policy, particularly in small open advanced economies. The scope and influence of monetary policy in these economies is heavily constrained by economic and financial developments outside their borders. As a result, expectations of what monetary policy can achieve often run ahead of reality. I will then discuss some of the alternate views around an appropriate strategy for managing monetary ... (full story)