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Conquering Fear of Floating: Australia's Successful Adaptation to a Flexible Exchange Rate

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  • Mr. Craig Beaumont
  • Li Cui

Abstract

Australia has enjoyed fifteen years of uninterrupted economic expansion since 1992 despite shocks such as the Asian crisis in 1997-98 and the information technology bust in 2000-01. This resilient economic performance owes much to wide-ranging structural reforms and the improved frameworks for monetary and fiscal policies that were implemented after the Australian dollar was floated in 1983. In addition to gaining the expected macroeconomic benefits from exchange rate flexibility, the float appeared to help motivate and facilitate the subsequent reforms. Australia's experience with adapting to a floating currency may therefore be of broader interest.

Suggested Citation

  • Mr. Craig Beaumont & Li Cui, 2007. "Conquering Fear of Floating: Australia's Successful Adaptation to a Flexible Exchange Rate," IMF Policy Discussion Papers 2007/002, International Monetary Fund.
    • Handle: RePEc:imf:imfpdp:2007/002
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    References listed on IDEAS

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    Cited by:

    1. Edward Nelson, 2020. "The Continuing Validity of Monetary Policy Autonomy under Floating Exchange Rates," International Journal of Central Banking, International Journal of Central Banking, vol. 16(2), pages 81-123, March.
    2. Alexander Ballantyne & Jonathan Hambur & Ivan Roberts & Michelle Wright, 2014. "Financial Reform in Australia and China," RBA Research Discussion Papers rdp2014-10, Reserve Bank of Australia.
    3. Jonathan Hambur & Lynne Cockerell & Christopher Potter & Penelope Smith & Michelle Wright, 2015. "Modelling the Australian Dollar," RBA Research Discussion Papers rdp2015-12, Reserve Bank of Australia.

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