I also want to make it clear that my comments are primarily about the medium term, rather than being focused on the short-term cyclical situation. 5  See Banks G (2012), “Productivity Policies: The ‘To Do’ List”, Speech at the Economic and Social Outlook Conference, “Securing the Future”, Melbourne, 1 November.
Monetary policy cannot be loosened in advance of these other reforms unless there is a clear notion of the extent of fiscal tightening and certainty about the time horizon over which microeconomic reforms can be effectively implemented and achieve results. In the absence of such coordination, excessively low real interest rates will not necessarily bring about increased investment.