However, the basic messages we repeatedly heard from both policymakers and academia here in the United States were, that “there will not be a nationwide decline in house prices” and that “even if a bubble were to burst, it would be manageable through aggressive monetary easing”.
The first is that over the past two decades we have seen unusually strong growth in the average real income generated by each hour of work in Australia. Since 1993, our effective purchasing power for each hour of work has increased by a cumulative 55 per cent, or around 2¼ per cent per year on average.