Tight labor markets are putting pressures on wages, but competitive markets are limiting pricing leverage and causing profits to be squeezed. Under these circumstances, will businesses become more cautious in their spending and hiring plans? Rising stock prices continue to point to strong consumer demand, but valuations are high by historical standards and one wonders whether this stimulus will remain so strong.
[6]  As a result, despite being a net debtor nation, Australia enjoys a transfer of financial wealth from abroad when the Australian dollar depreciates, other things equal. [7]  Debelle G (2017a), ‘How I Learned to Stop Worrying and Love the Basis’, Speech at the BIS Symposium: ‘CIP – RIP?’, Basel, 22 May.