- Title
- Monetary policy, inflation, and inflation volatility in Australia
- Creator
- Hossain, Akhtar
- Relation
- Journal of Post Keynesian Economics Vol. 36, Issue 4, p. 745-779
- Publisher Link
- http://dx.doi.org/10.2753/PKE0160-3477360408
- Publisher
- M.E. Sharpe
- Resource Type
- journal article
- Date
- 2014
- Description
- This article presents an overview of monetary policy in Australia and highlights the persistence and volatility of inflation under successive monetary policy regimes, 1950-2010. A series of unit root tests specified both linearly and nonlinearly investigate whether inflation persistence has the characteristic of a unit root. The overall results for the full sample period, 1950-2010, and two subsample periods, 1970-2010 and 1993-2010, suggest that Australia's high inflation persistence does not incorporate a unit root, with the post-1993 analysis most emphatically yielding the result. High inflation persistence and volatility in Australia suggest that inflationary shock takes a long time to dissipate but does not permanently alter the low average level of inflation. The empirical results suggest that inflation and inflation volatility have a feedback relation while inflation volatility affects the rates of economic growth and unemployment.
- Subject
- Australia; inflation; inflation volatility; monetary policy
- Identifier
- http://hdl.handle.net/1959.13/1295858
- Identifier
- uon:19140
- Identifier
- ISSN:0160-3477
- Language
- eng
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