EconPapers    
Economics at your fingertips  
 

The Making of Contemporary Australian Monetary Policy - Backward- or Forward- Looking?

Ying Chen, Hanyang Zhang, Kwok-Leung Tam and Maoguo Wu

International Journal of Economics and Finance, 2018, vol. 10, issue 6, 127-140

Abstract: Monetary authorities rarely disclose the true reasons behind their policy reactions. A tracing of the policy reaction function to see if the monetary authority is applying simple rules holds the potential to offer profound insight into the past behavioral relationship between the monetary authority and economic agencies. A reasonable body of knowledge about the direction of monetary policy would, moreover, assist economic agencies in forming their expectations, which would in turn, be useful for the monetary authority in anticipating the likely trends of the overall economy. The main objective of this study is to track de Brouwer and Gilbert (2005) from the Australian financial deregulation era (from 1983 to 2002) to the present. Empirical findings show that the Reserve Bank of Australia (RBA) is more forward-looking when formulating monetary policy rather than backward-looking, and that inflation targeting plays a significant role in stabilizing the output of the economy.

Keywords: backward-looking; forward-looking; generalized method of moments (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.ccsenet.org/journal/index.php/ijef/article/view/74739 (application/pdf)
http://www.ccsenet.org/journal/index.php/ijef/article/view/74739 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:10:y:2018:i:6:p:127-140

Access Statistics for this article

More articles in International Journal of Economics and Finance from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().

 
Page updated 2020-06-20
Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:6:p:127-140