Australia has just had an interest rate rise decided upon by its central bank. This seems to be the primary tool they have in terms of monetary policy, other than some pretty blunt tools re quantitative easing.

    Are there other tools available that would be appropriate for a central bank to utilise? And are there ways where some portion of fiscal policy could be given to such an institution for similar purposes?

    The reason behind the question is an idea in Aus that, instead of interest rate rises, the RBA could instead tweak the GST (broadly a 10% sales tax) with similar effects on monetary supply, while spreading the load more across society, rather than just those with loans. This passed the sniff test, but I'm not an expert. Are there other ideas floating around that might work similarly?

    What are some fiscal and monetary tools to aid with inflation?
    byu/BCPisBestCP inAskEconomics



    Posted by BCPisBestCP

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