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Actually, the problem is harder. For instance, in Australia, those working in the resources sector are enjoying a boom while the rest of the economy is in the d
by teyc 15y ago
Actually, the problem is harder. For instance, in Australia, those working in the resources sector are enjoying a boom while the rest of the economy is in the doldrums. The so called two-speed economy means that the Reserve Bank has a difficult time controlling inflation by means of interest rate.
- nhaehnle 15y agoThis is actually one of the most important arguments in favour of using fiscal policy for employment and inflation targeting. Monetary policy (i.e. the interest rate) is just such a blunt tool, and its effects are really not that well understood.
- teyc 15y agoIt is politically very difficult, because the government is then seen to be putting brakes on the most promising sector in the economy.