11 If the economy faces a large contractionary shock, the optimal monetary policy response is to  7  Akerlof, Dickens, and Perry (2000). The main idea can be described as follows: During periods of low productivity growth and no inflation, firms that need to cut their relative wages can do so only by cutting money wages.
In the case of energy prices, while the world price of oil in US dollars certainly is completely outside our control, it is the Australian dollar price of oil that actually matters for the Australian motorist. That price is lower at present than it might have been, because of the rise in the exchange rate.