It’s great to be back at the ANU, where almost 30 years ago I was embarking on my study of botany just across campus, with some economics on the side for good measure. It was my dislike of compulsory chemistry classes led me down that side path. Tonight I want to talk about the effects of monetary policy on the economy.
Interest rates have been at very low levels for some time. Yet economic growth is below trend, the unemployment rate is relatively high and domestic inflationary pressures are well contained. This is expected to remain the case for a time. It’s natural then to ask whether monetary policy is less effective than in the past.