The Evolution of Central Banking and Monetary Policy in the Asia-Pacific

The Evolution of Central Banking and Monetary Policy in the Asia-Pacific

Akhand Akhtar Hossain

This book of case studies is a contribution to monetary macroeconomics in which country-specific experience and issues in inflation and monetary policy are reviewed and analysed in an historical context. In doing so, the key ideas and views on the sources and dynamics of inflation and monetary-policy behaviour are investigated after taking into account institutional arrangements for the conduct of fiscal and monetary policies. This book selects for study twelve diverse countries from the Asia-Pacific region including the US, China, Australia, India, Japan, Hong Kong SAR (China), South Korea, the Philippines, Singapore, Sri Lanka, Thailand and New Zealand.

Chapter 2: Australia

Akhand Akhtar Hossain

Subjects: asian studies, asian economics, economics and finance, asian economics, money and banking


Australia is an immigrant society numbering about 23 million and dominated by peoples of European ethnicity. Most of Australia is semi-arid or desert, leaving it with a population density of just 3 per square kilometre. Australia is one of the advanced countries of the Asia-Pacific region. Australia’s resource-rich, service-oriented economy is the 12th largest in the world. The services sector contributes about 70 per cent of GDP while the agricultural and mineral sectors, which contribute respectively 3 and 5 per cent of GDP, have disproportionately high importance in foreign trade. Consequently, Australia remains a major exporter of agricultural products, namely wheat and wool, minerals, namely iron ore and gold, and energy, namely liquefied gas and coal. Under a liberal democratic political system, Australia has sustained a high degree of political stability for over a century. The Australian government, irrespective of political persuasion, has demonstrated commitment to improving the quality of macroeconomic management. When political instability and polarization dominate a society, they generally raise inflation and its volatility.

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