Monetary policy, inflation, and inflation volatility in Australia

Akhand Hossain ()

Journal of Post Keynesian Economics, 2014, vol. 36, issue 4, 745-780

Abstract: This article presents an overview of monetary policy in Australia and highlights the persistence and volatility of inflation under successive monetary policy regimes, 1950-2010. A series of unit root tests specified both linearly and nonlinearly investigate whether inflation persistence has the characteristic of a unit root. The overall results for the full sample period, 1950-2010, and two subsample periods, 1970-2010 and 1993-2010, suggest that Australia's high inflation persistence does not incorporate a unit root, with the post-1993 analysis most emphatically yielding the result. High inflation persistence and volatility in Australia suggest that inflationary shock takes a long time to dissipate but does not permanently alter the low average level of inflation. The empirical results suggest that inflation and inflation volatility have a feedback relation while inflation volatility affects the rates of economic growth and unemployment.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://hdl.handle.net/10.2753/PKE0160-3477360408 (text/html)
Access to full text is restricted to subscribers.

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:mes:postke:v:36:y:2014:i:4:p:745-780

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MPKE20

DOI: 10.2753/PKE0160-3477360408

Access Statistics for this article

More articles in Journal of Post Keynesian Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().