
Are rate rises the only way to stop inflation?
Grattan Institute
The Importance of Fiscal Policy in Controlling Inflation
The RBA is using what levers it has, but there are other things out there. And fiscal policy is where governments are using taxing and spending decisions to influence inflation. But I'd really like to know why fiscal policy isn't the main lever used to control inflation. Governments used to play a big role in this sort of day-to-day tinkering with the economy to try and manage inflation. It was handed over primarily to the Reserve Bank in the early 90s,. That's been the predominant method of managing the demand side or managing the cyclical nature of the economy.
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