Australia and the Zero Lower Bound on Interest Rates: Some Monetary Policy Options

Declan Trott

Agenda - A Journal of Policy Analysis and Reform, 2015, vol. 22, issue 1, 5-20

Abstract: This paper argues that Australia needs a contingency plan for monetary policy when interest rates hit zero, and considers various options. Level targeting appears undesirable as a long-run policy due to the lack of an appropriate target variable - prices, wages and nominal GDP all being unsuitable - but may be useful as a temporary expedient. Other possibilities include a higher inflation target and temporary exchange rate targeting.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:acb:agenda:v:22:y:2015:i:1:p:5-20

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