The Fiscal Monetary Policy Of Australia - 1566 Words

The post-GFC expansionary monetary policy of Australia Background The global financial crisis (GFC) is begun with the collapse of Lehman Brothers in Sep. 2008, when a loss of confidence in stock investors of the value of sub-prime mortgages caused a liquidity crisis, resulting the global central banks injecting a large amount of capital into the financial markets and consumers confidence hit the bottom, according to McKibbin, W.J. (2009, p.1). The second phase of GFC stepped after the US bank crisis has evolved into the euro crisis, which thought to be the will of US leading troubles. Europe had its own internal unbalances that proved just as significant as those in US. Southern Europe racked up huge current-account deficits in the first decade while countries in the north ran offsetting surpluses. The imbalances were financed by credit flows from the euro-zone core to the overheated real estate markets of countries like PIIGS (Portugal, Ireland, Italy, Greece and Spain). The euro crisis is also a continuation of financial crisis by other means, as market ignoring the weaknesses of government debts overwhelmed its GDP. The result is that the GFC has seen the largest and sharpest drop in global economic activity nowadays. In 2009, the most major developed economies are in a deep recession. The fallout for global trade, both for volumes and types were dramatic. The OECD predicts world trade volumes will shrink by 13 percent from 2008 to 2009. Governments have responded withShow MoreRelatedDiscuss The Best Option For Australia And Will Justify The Rationale1706 Words   |  7 PagesIntroduction The use of both monetary and fiscal policies has been specifically aimed at reducing inflation and implementing policies for sustained economic growth. This paper will present a discussion on the definitions of each policy while examining their role in economy. Based on the obtained insights, the paper will discuss the best option for Australia and will justify the rationale. In the end, the discussion will be given a conclusive shape in which the key learning will be summarized andRead More Role Of Government In Mixed Economies Such As Australia Essay1741 Words   |  7 PagesEconomies Such As Australia What role do governments have in modern mixed economies such as Australia? Using appropriate indicators (macro economic aggregates) outline the present state of the economy. In what ways is the Commonwealth government using fiscal and monetary policies to influence the Australian economy? What are the main features of the governments micro economic policy? Why is the government concerned about microeconomic reform? Synopsis: The role of government in Australia today has lessRead MoreKeynesian Theory And Aggregate Demand1499 Words   |  6 PagesNet Exports. In Australia the aggregate demand and GDP is affected by the Fiscal Policy. 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Australia is a country with very low levels of economic, political and financial system risk. The Australian economy has experienced over 20 years of nonstop economic expansion, which includes the global financial crisis. Australia’s strong economic position before the global economic slowdown and the aggressive monetary and fiscal policies implemented throughout helped to make the slowdown relatively mild for the countryRead MoreEssay on Australian Economic Issues1421 Words   |  6 Pagesannual progress. These measures are necessary so that policy decisions can be implemented accordingly. Fiscal policy may only be implemented once per year in the annual budget while monetary policy may be conducted 12 times per year (RBA meetings occurring once per month). Therefore, fiscal policy is used to influence annual growth/the business cycle while monetary policy is used to influence quarterly growth. 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