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An interesting exchange today between Professor Ross Garnaut and the RBA’s Mr Rainbow, from the AFR:
Professor Garnaut warned against calls for additional government stimulus spending on infrastructure, saying the economy needed to rebalance through a lower real exchange rate, something that would boost Australia’s international competitiveness.
“The way you get a lower real exchange rate is to tighten fiscal policy and ease monetary policy,” he said.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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