Exchange Rate Management and Monetary Policy in Australia: An Examination of the Post-Float Era

In the last twenty years, the exchange rate systems and monetary policy in Australia have undergone through several facelifts. After the fixed exchange rate to the U.S. dollar during the Bretton Woods period and a number of quasi-fixed regimes that followed, Australia floated its currency in December 1983. Under the flexible exchange rate system, monetary targeting and the checklist approach both failed to bring down high inflation in the 1980s. After a successful disinflationary episode, the Reserve Bank of Australia adopted inflation targeting. This book examines the Australian exchange rate and monetary policies in terms of the effects and their interactions with the economy in three aspects: (1) the level of exchange rate management given that the regime is not a purely clean float; (2) the channels of monetary policy transmission mechanisms; and (3) asymmetry in the monetary policy-making decisions. This book should be useful to professionals and academics in the fields of applied macroeconomics that are interested in the evolution of monetary policy in Australia.

Shawn C.-Y. Leu, PhD in Economics from the University of Sydney, Sydney, Australia. Lecturer in economics at La Trobe University, Melbourne, Australia. His research has been in the general fields of macroeconomics and international economics, mainly applied work with a substantial interest in the Australian economy.