Reserve Bank vindicated
The critics are wrong; the Bank is no ‘inflation nutter’
Critics have been pushing hard for the Reserve Bank’s mandate to be broadened to make it consider growth and employment concerns directly, not just inflation. But according to new ground-breaking research, the Bank already does so.
The Bank is a flexible, forward-looking inflation targeter that gives considerable attention to labour market conditions when deciding the path of interest rates, according to an empirical study undertaken by Laurence Harris, a professor of economics in the School of Finance & Management at SOAS, University of London, and former National Treasury economist Shannon Bold.