The change in the world’s perception of the Australian economy from one of instability to one of stability has obvious advantages to us, but it does not eliminate the need for hard policy decisions - it simply changes the nature of those decisions.
But before discussing that, I would like to illustrate some of the changes in the behaviour of economic variables that have given rise to the changed perception of the Australian economy. The first clear sign that the Australian economy was showing a new-found stability was the way in which it handled the Asian crisis.