Australia's stance in monetary policy

Early 2000s

• Introduction of GST & ER depreciation
  • → inflationary consequences
    • → Monetary policy tightened to deal with inflation

Mid 2000s

• mild eco downturn
  • → expansionary monetary policy
    • → gradually increasing interest rates (to address inflation from booming commodity prices )

2008-2009 (GFC)

• Speculation concerns of GFC impacts
  • → RBA cuts cash rate to ==3%==
    • (50-year-low)

2009-2011

• monetary policy returns as GFC eases
  • (cash rate rising: 4.75% by late 2010)

2011-2018

• monetary policy remains expansionary
  • (cash rate target, historic low: 1.5% 2016-2019)

2019-2021

• subdued eco conditions and high unemployment

  • → RBA eases monetary policy further
  • cash rate target: 0.75% following covid outbreak

• later into covid

  • → cash rate: 0.1%
  • and RBA implemented various unconventional monetary policy measures

2022-

• RBA responds to rising inflation, sharply increasing interest rates
  • 12 interest rate increases from 2022-2023
    • leading to 4% cash rate.

Article

‘Labour braces for higher inflation, interest rates’

1. 3.6%, expected 3.8%
2. headline inflation minus one-off offsets
3. raise cash rate
4. .
5. fiscal policy
6. persistent area of inflation: services
7. bullock said AD is too high (ahead of AS)