Arbeitspapier
Assessing Australian Monetary Policy in the Twenty-First Century
Using the Reserve Bank of Australia's MARTIN model we compare actual monetary policy decisions to a counterfactual in which the cash rate is set according to an optimal simple rule. We find that monetary policy played a crucial role in avoiding a potential recession in 2001 and mitigating the downturn in 2008-2009. By contrast we find that the cash rate was too high during 2016-2019, keeping inflation below the Reserve Bank's target band. Optimal monetary policy in 2016-2019 would have involved a substantially lower cash rate and would have produced significantly better employment outcomes.
- Language
-
Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 15561
- Classification
-
Wirtschaft
Money and Interest Rates: Forecasting and Simulation: Models and Applications
Monetary Policy
Central Banks and Their Policies
- Subject
-
optimal monetary policy
unemployment
output gap
inflation
- Event
-
Geistige Schöpfung
- (who)
-
Gross, Isaac
Leigh, Andrew
- Event
-
Veröffentlichung
- (who)
-
Institute of Labor Economics (IZA)
- (where)
-
Bonn
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gross, Isaac
- Leigh, Andrew
- Institute of Labor Economics (IZA)
Time of origin
- 2022
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