Bring on the QE. We needed a low dollar policy in 2011 but we need it even more today.
Yet, just as the RBA has finally turned sane, the Australian economic pet shop has gone mad. Leading the stupidity is the reliably useless AFR editorial:
Keynesian economics was fond of motor metaphors. All that was needed was a bit of pump-priming to get economies moving again. But all these policies are doing is pouring ever more fuel into a defective engine. The motor has too many other blocked pipes of labour inflexibility and excessive taxes for it to run properly anyway, as Dr Lowe has also highlighted. The spillover of excess fuel runs away into asset bubbles. But the other lasting damage of easy money is that it has so far relieved politicians of the political effort of reforming and repairing those supply-side impediments. Bringing QE to Australia is not going to help that.
