That said, these are complex and ambiguous issues, and at the Reserve Bank a lot of work is ongoing to understand the transmission mechanisms for, and the wider implications of, monetary policy, particularly in relation to the new suite of tools I have just mentioned. Thank you for listening and for the privilege of delivering this speech. Page 17 of 17
For example, if we had invested in the US equity market (in Grade A stocks) over the last 20 years we would have earned an average annual return of 11½ percent compared with an 8½ percent return we could have earned in US fixed income instruments. However, the volatility of the equity portfolio would have greatly exceeded that of the fixed income portfolio.