Why the RBA needs to talk about future interest-rate policy
- Written by Efrem Castelnuovo, Principal Research Fellow, Melbourne Institute of Applied Economic and Social Research, and Professor of Economics, Department of Economics, University of Melbourne
The Reserve Bank of Australia should follow the example of other central banks and be clearer about when and how rates will change, called “forward guidance”, to make its policy more effective.
At the moment the RBA follows an approach to implement monetary policy known as inflation targeting. This means it has a numerical target for...
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