Monetary policy, inflation, and inflation volatility in Australia

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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