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Tuesday, November 22, 2005


Matt Canavan

But yet the RBA does a pretty good job. I don't think you need to know too much about monetary policy to be a central banker. Indeed, it might be an advantage. Those wrapped up in economics often become captured by the latest theory, often with disastorous results. Note that the one very poor decision that the RBA has made in recent years - the decision to continue to raise interest rates during the early 90s recession - was driven by 'experts' at Treasury who were obsessed with the current account deficit.

Sinclair Davidson

Matt and I tag teamed at Imagining Australia on the same topic. I'm not convinced there is any evidence to suggest the RBA is any better or worse than the US Fed (for example). Andrew Leigh points to the 1990 policy indiced recession, but in those days the RBA was under the political control of the government.

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