Sunday, March 23, 2008

Australia’s Money Mandarin’s, by Stephen Bell

I’m trying to learn more about how our economy works by taking small bites of books like this. Stephen Bell here basically shows how the Reserve Bank’s growing ‘independence’ came into being. The inverted commas are probably called for because essentially the government can come in and over ride the Reserve’s monetary policy if it believes it to be wrong.

To lay readers like myself, it may seem like the Reserve Bank has a pretty simple job to do, just raising and lowering interest rates in order to make sure inflation doesn’t go over 3 percent. Sometimes the bank does get it wrong, as with the recession of the early nineties.

This book may seem like the sort of thing read by boffins who are obsessed with monetary policy and the politics of the economy. However, patient common readers will also find it highly instructive and thankfully free of technical language.

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