The RBA has failed dismally - look at inflation and unemployment

Stephen Koukoulas

In the dismal science of economics, the RBA has failed dismally when it comes to its inflation target and managing demand in the Australian economy. On Tuesday it cut official interest rates to 1.5%, but in doing so it leaves the Australian economy condemned to some of the highest interest rates in the industrialised world. The RBA has not looked all that closely for overseas guidance – this latest cut comes years after the US, the eurozone, Britain and Canada set interest rates at 0.5% or less. This harsh assessment of the RBA’s slow and cumbersome approach to interest rate cuts is backed up by several vital macroeconomic indicators. The annual increase in the consumer price index has been below 2% – the bottom of the RBA target band – since late 2014. There is no evidence in recent data that inflation will pick up any time soon. Click here for the full article: (VIEW LINK)


Stephen Koukoulas

Stephen Koukoulas has a rare and specialised professional experience over more than 25 years as an economist in government, as Global Head of economic and market research, a Chief Economist for two major banks and as economic advisor to the Prime...

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James Marlay

Hi Stephen, I think the RBA has actually done a pretty good job when you take into consideration the fact that they have one blunt monetary tool at their disposal. With rates at 1.5% they have far more options at their disposal than most other central banks. The fact is that there has been a distinct lack of fiscal support combined with a lack of political leadership. I personally don't think the RBA should be lumped with shouldering the whole burden of creating demand and jobs...

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