Abstract
AbstractThis paper examines the evolution of monetary policy in Australia since the mid 1980s when financial markets were rapidly deregulated. The paper discusses the conduct of monetary policy within the framework of monetary targeting and how deregulation affected this framework. Alternative strategies for conducting monetary policy are discussed. However, it is argued that since 1985, monetary authorities have often changed the focus of monetary policy with no specific framework within which the policy is implemented.Deregulation has forced interest rates to become the main focus of monetary policy. But, since the deregulation of financial markets, the transmission mechanism by which interest rates affect the economy, has changed significantly.
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