The Making Of Contemporary Australian Monetary Policy - Forward Or Backward Looking?

DOI

10.2991/ictim-17.2017.27How to use a DOI?

Keywords

Backward looking, forward looking, generalized method of moments

Abstract

Monetary authorities rarely disclose their true reasons for their policy reactions. Tracing the policy reaction function to see if the monetary authority is using simple rules would 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 assist economic agencies' expectations, which would in turn, be useful for the monetary authority in anticipating the likely trends for the general economy. The main objective of this study is to extend de Brouwer and Gilbert (2005) as from the Australian financial deregulation era (from 1983 to 2002) to the present. Empirical findings show that the Reserve Bank of Australia (RBA) is 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.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Ying Chen
AU  - Maoguo Wu
PY  - 2017/09
DA  - 2017/09
TI  - The Making Of Contemporary Australian Monetary Policy - Forward Or Backward Looking?
BT  - Proceedings of the International Conference on Transformations and Innovations in Management (ICTIM 2017)
PB  - Atlantis Press
SP  - 349
EP  - 376
SN  - 2352-5428
UR  - https://doi.org/10.2991/ictim-17.2017.27
DO  - 10.2991/ictim-17.2017.27
ID  - Chen2017/09
ER  -