RBA's Obscure 'Third Objective' Rule

The transcript discusses the evolution of central bank policies in Australia, starting from the 1930s when the government ordered expansionary policies that were not followed, leading to economic struggles. Post-WWII, the Labour government aimed for full employment and economic stability, despite Treasury's conservative stance. The 1990s recession saw a debate between quick and slow interest rate cuts, with Bernie Fraser advocating for employment and welfare considerations. The transcript highlights the challenges of balancing inflation, employment, and national interest in economic policy.

What was the main reason the central bank ignored the government's orders in the 1930s?

• They were underfunded by the government.

• They believed in a different economic theory.

• They were following international trends.

• They wanted to maintain their independence.

What was a key objective included in the Commonwealth Bank Act after World War II?

• Currency devaluation

• Full employment

• Increased taxation

• Privatization of banks

Why did the Treasury oppose the inclusion of full employment in the Commonwealth Bank Act?

• They believed it was too costly.

• They wanted to focus on international trade.

• They preferred to prioritize technological advancement.

• They feared it would conflict with inflation control.

During the 1990s recession, what was the main argument for quick interest rate cuts?

• To attract foreign investment

• To boost exports

• To address employment and welfare concerns

• To stabilize the currency

Who was the Treasurer during the early 1990s recession in Australia?

• Ben Chifley

• Paul Keating

• Bernie Fraser

• Stephen Bell