A fascinating idea

Don Brash has floated a fascinating idea. To give the Reserve Bank Governor a second tool for fighting inflation, apart from raising interest rates.  It is to increase and decrease the petrol tax as a way to take the heat out of the economy without impacting exporters so much through high interest rates leading to a high dollar.

I’d love to see some economic modelling on this proposal – how much does a change in petrol prices affect consumption and spending etc.