The bank’s proposed new dual mandate to give “equal consideration” to full employment and price stability is not intended to protect jobs at the cost of high inflation, says one of the RBA reviewers.
The Reserve Bank of Australia’s proposed new dual mandate to give “equal consideration” to full employment and price stability is not intended to elevate protecting jobs at the cost of high inflation, according to one of the economists who conducted a review of the central bank.would force the RBA to communicate its interest rate decisions more transparently by explaining the trade-offs between inflation and employment.
Shadow treasurer Angus Taylor is awaiting the government’s legislation and updated Statement on the Conduct of Monetary Policy between Treasurer Jim Chalmers and the RBA board under incoming governor Michele Bullock. The pair have been speaking regularly about implementing the RBA review and the upcoming statement.released in April, alongside former Bank of Canada senior deputy governor Carolyn Wilkins and the secretary for public sector reform, Gordon de Brouwer.
Senior RBA and Treasury officials and the RBA reviewers have been surprised by some of the reaction to the refined dual mandate, saying the RBA’s “flexible” inflation-targeting regime already considers the short-term trade-offs between inflation and employment.everal people who have served on the RBA board downplayed the significance of the revised mandate.
“At the RBA, we were never single-minded ‘inflation nutters’. In fact, the ‘on average over the cycle’ formulation was designed to allow us to take into account the employment consequences.
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