Full Employment and Price Stability (1 Viewer)

[ashwin]

How has the government managed to keep unemployment at the natural rate whilst keeping inflation within the target range?

 

[jon117]

This has basically been able to be done because of the use of monetary policy to control inflation, while at the same time Australia has experienced strong economic growth.

Consequently with strong eco growth unemployment is down, while at the same time monetary policy has kept inflation low.

Also the microeconomic reforms in the labour market have reduced wage expectations of unions and this has played a role in keeping inflation low.