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The Case for Reform of the Reserve Bank of Australia Policy and Communication Strategy

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  • Bruce Preston

Abstract

At any time, the public should be able to evaluate whether the Reserve Bank of Australia's (RBA) interest rate decisions are consistent with achieving statutory mandates. The RBA's current policy and communication strategy makes this difficult. The mandates, as interpreted by the RBA, fail to provide a clearly identifiable performance benchmark. And the supporting communication strategy falls short of a commitment to explain the economic basis of why and how interest rate decisions achieve mandated objectives. Examples of both concerns are given from various public documents. Basic reforms would improve the accountability and effectiveness of monetary policy.

Suggested Citation

  • Bruce Preston, 2020. "The Case for Reform of the Reserve Bank of Australia Policy and Communication Strategy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(1), pages 95-104, March.
    • Handle: RePEc:bla:ausecr:v:53:y:2020:i:1:p:95-104
    DOI: 10.1111/1467-8462.12366
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    Cited by:

    1. Joan Huang & John Simon, 2021. "Central Bank Communication: One Size Does Not Fit All," RBA Research Discussion Papers rdp2021-05, Reserve Bank of Australia.

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