- Dec 6, 2005
- AFL Club
- Western Bulldogs
- Other Teams
- Footscray, Coney Island Warriors
I think part of Stiglitz's point is that monetary policy isn't the only way to curb inflation, however the veneer of independence of central banks means governments aren't willing to risk political capital by using fiscal policy to do any of the heavy lifting.I don't think central banks can ever be truly independent of Governments, by their very nature they have to react to economic conditions caused, at least in part, by the Government(s) of the day.
I agree with Stiglitz's observations, to a point. While the underlying drivers of current inflation are specific to some sectors, the nature of those industries (e.g. fuel prices) impact almost every other sector in the economy. I just can't fathom that the RBA can do anything else other than raise rates in this environment. Yes, its going to make life more difficult, but the external inflationary impacts so absolutely no signs of slowing, so there need to be action taken to curb it where possible.