The RBA cut rates from already low 1.75% to 1.5% -BUBBLE ALERT- we will be going negative next. See my related articles Deflation Down Under, RBA Kangaroos Kick For Lower Rates!, Interest Rates Are A Market Price Signal Not To Be Interfered With, Central Banks Interest For Resolving Unemployment, and Money Pumping – What Malinvestments? … Continue reading RBA Rate Cut 1.5%, How Long Until Negative?
Currency devaluation means a reduced value of currency with respect to foreign currencies and its reduced purchasing power to foreign goods, which result from monetary policy. In a small open economy, as such the assumptions of the Mundell-Fleming model, currency devaluation can result from expansionary monetary policy, referring to the lower exchange rate instead of … Continue reading Currency Devaluation: Exports > Imports
The view, which boosts spending on new factories that can hire additional workers, assumes unemployment is the main issue and uses short-run economic stimulus to counter for the lack in private savings. Why not boost employments further, and take the advice of John Maynard Keynes and Paul Krugman and employ as many people in the … Continue reading Central Banks Interest For Resolving Unemployment
The inflation rate is a measure of the increase in asset prices, measuring the percentage change in the average price level from the previous year. Where a positive inflation rate means rising prices, a negative inflation rate means falling prices, and a declining positive inflation rate means rising prices at a slow rate. Inflation can be … Continue reading Inflation
The Reserve Bank of Australia (RBA) was created by the Reserve Bank Act 1959 as “Australia’s central bank, which is responsible for managing the Commonwealth’s monetary policy, ensuring financial stability, and printing and distributing currency.” (Reserve Bank of Australia, 2011) This article in explaining the premise of the RBA and monetary policy will consider … Continue reading Monetary Policy and the Reserve Bank of Australia