We are living in a new economic world since the global financial crisis, Reserve Bank governor Alan Bollard says.
It is one in which policymakers and businesses alike have to contend with new uncertainties.
In a lecture at the Australian National University in Canberra yesterday, he reflected on some of the changes. One is the combination, unique in postwar economic history, of weakness in the big advanced economies together with rapid growth in the resource-hungry and populous emerging world.
"Over the next few years Australian and New Zealand firms will need to make strategic decisions about how to make the most of these opportunities," he said.
Another change is the legacy of debt and caution from the boom and bust respectively.
"In advanced economies, deleveraging in the private sector appears to have started, but will take a long time - perhaps a generation. Very cautious households are a large part of the story of a slow and fragile recovery."
In New Zealand the apparently lower appetite for debt was perhaps a return to the more restrained standards of postwar years, but it remained to be seen whether deleveraging would continue.
Many researchers were studying the possible adverse effects of very low interest rates on investor risk-taking, Bollard said, and the effect on global financial conditions of large-scale quantitative easings by major central banks.
"In a globalised world, big players lowering their domestic interest rates ... will ... tend to promote capital flows to other countries and appreciation of their exchange rates," he said.
"As a small open economy, New Zealand has often seen the effects of carry trades on the exchange rate. This can be distortionary ..."
Bollard sounded a note of caution about expecting too much of the new macro-prudential tools regulators are arming themselves with, such as capital and liquidity buffers.