Maybe being an island off the beaten path helps clear-thinking!

I believe central bankers should pay much more attention to monetary policymaking in Australia. Stephen Kirchner a research fellow at The Centre for Independent Studies writes:

The Financial System Inquiry’s interim report recognised that the Reserve Bank and the Australian Prudential Regulatory Authority have considerable scope to manage risks to financial stability without greater reliance on so-called macro-prudential policies. It noted that the effectiveness of such measures is not well established and that there are practical difficulties in their implementation. The inquiry largely echoes the views of the Reserve Bank and other Australian regulators on this issue.

2 thoughts on “Maybe being an island off the beaten path helps clear-thinking!

  1. I wonder if the answer lies in Aussie culture.

    As widely noted, they tend to be gregarious, robust people, not so worried about the finer details. If inflation is somewhere between 2 and 3 percent, that’s good enough. They want prosperity, that’s the main thing.

    Contrast the attitude to that of Dallas Fed President Richard Fisher, who stated, “I consider inflation an evil spirit that rots the core of economic prosperity and must never, ever be countenanced.”

    An Aussie would pull Fisher aside, and say, “Have a beer mate. Relax a little. No sense getting worked up over a mere index. We’ll get by, and make some money too.”

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