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Deregulation and the Conduct of Monetary Policy

Published online by Cambridge University Press:  01 January 2023

M. Monadjemi  and
C. Kearney
M. Monadjemi
Affiliation:
School of Economics, University of New South Wales
C. Kearney
Affiliation:
School of Business & Technology, University of Western Sydney Macarthur
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Abstract

This paper examines the evolution of monetary policy in Australia since the mid 1980s when financial markets were rapidly deregulated. The paper discusses the conduct of monetary policy within the framework of monetary targeting and how deregulation affected this framework. Alternative strategies for conducting monetary policy are discussed. However, it is argued that since 1985, monetary authorities have often changed the focus of monetary policy with no specific framework within which the policy is implemented.

Deregulation has forced interest rates to become the main focus of monetary policy. But, since the deregulation of financial markets, the transmission mechanism by which interest rates affect the economy, has changed significantly.

Type
Article
Information
The Economic and Labour Relations Review , Volume 1 , Issue 2 , December 1990 , pp. 18 - 33
Copyright
Copyright © The Author(s) 1990

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