Opinion: It’s possible Reserve Bank governor Dr Philip Lowe has been reading a book about speechmaking – the one that says: keep the message simple and keep saying it until it sinks in | 1RossGittins
It’s possible Reserve Bank governor Dr Philip Lowe has been reading a book about speechmaking – the one that says: keep the message simple and keep saying it until it sinks in. See if you can detect his one big message last week in his evidence to the Senate inquiry into the response to the coronavirus.
"But if the economy has not recovered reasonably well by then, as part of [Treasury’s] review we should perhaps be looking at an extension of the scheme, or a modification in some way. . . More generally, right through the next year or so, I think the economy is going to need support from both monetary policy [interest rates] and fiscal policy [the budget]."There are certain risks if we withdraw that support too early.
"So it’s an indirect channel and there’s a limit to what we can do. . . Going forward, fiscal policy will have to play a more significant role in managing the economic cycle than it has in the past. . . In the next little while there’s not going to be very much scope at all to use monetary policy in [the way it’s been used in the past 20 years].
"It’s very important that we don’t withdraw the fiscal stimulus too early," he said, adding a minute later that "my main concern is that we don’t withdraw the fiscal stimulus too early".
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