Developments abroad have long had a profound impact on the Australian economy and financial markets, and, no doubt, they will continue to do so. But the unusual nature of recent developments, particularly in the advanced economies, is changing the way in which global outcomes affect Australia. I would like to spend some time this evening talking about these changes.
It is useful to start off with the “big picture” and the key global influences on the Australian economy over recent times. Here, I would point to just two. The first is very much a positive influence – that is, the strong growth over a number of years in many emerging market economies, particularly those in Asia.