25 Years of Inflation Targeting in Australia: Are There Better Alternatives for the Next 25 Years?

33 Pages Posted: 8 May 2018 Last revised: 16 May 2018

See all articles by Warwick J. McKibbin

Warwick J. McKibbin

Australian National University

Augustus Panton

Australian National University (ANU)

Date Written: May 1, 2018

Abstract

This papers surveys alternative monetary frameworks and evaluates whether the current inflation targeting framework followed by the RBA for the past 25 years is likely to be the most appropriate framework for the next 25 years. While flexible inflation targeting has appeared to work well in Australia in the past decades, the nature of future shocks suggests that some form of nominal income targeting is worth considering as an evolutionary change in Australia’s framework for monetary policy.

Keywords: Inflation targeting, nominal income targeting, monetary framework

Suggested Citation

McKibbin, Warwick J. and Panton, Augustus, 25 Years of Inflation Targeting in Australia: Are There Better Alternatives for the Next 25 Years? (May 1, 2018). CAMA Working Paper No. 19/2018, Available at SSRN: https://ssrn.com/abstract=3171302 or http://dx.doi.org/10.2139/ssrn.3171302

Warwick J. McKibbin (Contact Author)

Australian National University ( email )

Crawfrod School of Public Policy
Canberra, ACT 2600
Australia
02-61250301 (Phone)
02-62735575 (Fax)

HOME PAGE: http://www.sensiblepolicy.com

Augustus Panton

Australian National University (ANU) ( email )

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