The Reserve Bank of Australia : the incompatibility of multiple objectives and inflation control

Schuele, Michael W. (1995). The Reserve Bank of Australia : the incompatibility of multiple objectives and inflation control Honours Thesis, School of Economics, University of Queensland.

       
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Author Schuele, Michael W.
Thesis Title The Reserve Bank of Australia : the incompatibility of multiple objectives and inflation control
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1995
Thesis type Honours Thesis
Total pages 108
Language eng
Subjects 14 Economics
Formatted abstract Since the late 1980's, with respect to monetary policy, the Reserve Bank of Australia (RBA) has placed considerable emphasis on the pursuit of price stability. The Banking Act of 1959 legislates the Bank to pursue three objectives. This paper is not arguing against the pursuit of price stability but rather the manner in which the RBA attempts to achieve this, under the existing legislation. This paper shows that the effective pursuit of price stability amongst multiple, simultaneous objectives is not possible in Australia.

A system of central bank independence is a more effective way of pursuing price stability. For central bank independence to operate efficiently it must be implemented via a new Banking Act. For there to be an effective overall coordination of policies, a new Banking Act should be part of more widespread structural reform.

 
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