The productivity commissions of the two nations indicated a shared Trans-Tasman currency could reduce business costs but pointed to Europe as an example of possible downsides.
A paper released by the commissions says the lower transaction costs of a single currency need to be weighed against mismatched business cycles such as the sudden boost to exports caused by the current Australian mining boom. The proposal was raised as part of a discussion paper examining ways to bolster Trans-Tasman economic integration.
"On the one hand, there are potential benefits in avoiding the transaction costs associated with having separate currencies," says the commissions' paper.
"On the other, where business cycles and economic changes affect the two countries differently, there could be costs in not having independent exchange rates. The recent experience of countries in the eurozone is instructive in this respect."
The relative significance of New Zealand to Australia's economy has waned in recent years. Australia has been New Zealand's largest trading partner in recent years, but New Zealand is only Australia's fifth largest partner.
While Australian lawmakers have occasionally entertained the prospect of a single currency, New Zealand's central bankers and politicians have tended to resist the proposal and argue that any such move would result in a relinquishing of the nation's monetary policy.
Australia's Prime Minister, Julia Gillard, said during a visit to New Zealand last year that she wanted the countries to move towards a single economic market but would not push for a single currency.
Source: Australia and New Zealand could adopt single currency - Telegraph
Looks like there is no such thing as a "Little New Zealander"
A paper released by the commissions says the lower transaction costs of a single currency need to be weighed against mismatched business cycles such as the sudden boost to exports caused by the current Australian mining boom. The proposal was raised as part of a discussion paper examining ways to bolster Trans-Tasman economic integration.
"On the one hand, there are potential benefits in avoiding the transaction costs associated with having separate currencies," says the commissions' paper.
"On the other, where business cycles and economic changes affect the two countries differently, there could be costs in not having independent exchange rates. The recent experience of countries in the eurozone is instructive in this respect."
The relative significance of New Zealand to Australia's economy has waned in recent years. Australia has been New Zealand's largest trading partner in recent years, but New Zealand is only Australia's fifth largest partner.
While Australian lawmakers have occasionally entertained the prospect of a single currency, New Zealand's central bankers and politicians have tended to resist the proposal and argue that any such move would result in a relinquishing of the nation's monetary policy.
Australia's Prime Minister, Julia Gillard, said during a visit to New Zealand last year that she wanted the countries to move towards a single economic market but would not push for a single currency.
Source: Australia and New Zealand could adopt single currency - Telegraph
Looks like there is no such thing as a "Little New Zealander"
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