It’s wonderful to be back at the Australia National University (ANU) and an honour to give this lecture that promotes discussion between academics and policy practitioners. Today, I would like to explore how changes in household behaviour– in particular saving 1 and debt dynamics – are influencing inflationary pressures.
Nearly ten years on from the start of the global financial crisis (GFC), some advanced economies are still struggling to reach the “escape velocity” needed to ensure that the economy grows above trend and generates a path of inflation that is consistent with central bank inflation targets. Despite extraordinary monetary accommodation in these advanced economies, economic growth remains disappointingly weak.