1  BIS Review 45/1999  Interest rates cannot deviate from the level necessary to determine the pre-set exchange rate. Fiscal policy becomes the pre-eminent stabilization tool by necessity.
Yet, as I have said before, this is a much better problem to have than those we see in many advanced countries. The event to which we have to adjust is inherently income-increasing for Australia. Moreover, we do not carry the legacies of the past several years in our banks’ or public sector balance sheets that are such an impediment in other places.