Let me now respond to the doves who argue that the Reserve Bank was too hawkish in its anti-inflationary stance. 24. First, I do not agree with the argument that the Reserve Bank failed to control inflation but only ended up stifling growth.
WPI inflation has come down from double digits to around 5 per cent; core inflation has declined to around 2 per cent. Yes, growth has moderated, but to attribute all of that moderation to tight monetary policy would be inaccurate, unfair, and importantly, misleading as a policy lesson.