The Reserve Bank's new boss has not backed away from tough talk, saying the bank must use its "blunt" tool of interest rates to hammer out inflation for the collective welfare of Australians.
Raising interest rates has not proved effective in curbing inflation so far. Why keep using a clearly ineffective, blunt tool that appears to be causing more harm than good?
It has had an effect. To show what it can do look at countries where they don’t (e.g. Turkey, Argentina) and you’ll see that raising interest rates is important. The government has other tools as well, but interest rates are a very important lever
Raising interest rates has not proved effective in curbing inflation so far. Why keep using a clearly ineffective, blunt tool that appears to be causing more harm than good?
It has had an effect. To show what it can do look at countries where they don’t (e.g. Turkey, Argentina) and you’ll see that raising interest rates is important. The government has other tools as well, but interest rates are a very important lever