Inflation expectations have wide-reaching effects on the macroeconomy and are an important part of the transmission of monetary policy. This paper analyses the Melbourne Institute survey of householders’ inflation expectations. Householders’ average inflation expectations vary with personal...

We estimate inflation expectations and inflation risk premia using inflation forecasts from Consensus Economics and Australian inflation-indexed bond price data. Inflation-indexed bond prices are assumed to be non-linear functions of latent factors, which we model via an affine term structure...

This paper examines the effect of inflation on productivity growth in Australia. Broad historical correlations suggest a negative relationship between inflation and aggregate productivity growth. The low-frequency nature of the relationship, however, means it is difficult to establish...

In this paper we develop a theoretical framework that helps to analyse the role of monetary policy in responding to asset-price bubbles. A large and rapid fall in the nominal price of assets that form the basis of collateral for loans from financial intermediaries can have adverse effects on...

This paper presents a new measure of underlying inflation: component-smoothed inflation. It approaches the problem of determining underlying inflation from a different direction than previous methods. Rather than excluding or trimming out volatile CPI items, it smoothes components of the CPI...

Standard trade theory suggests that internationalisation of an economy should lead to increased competitive pressures and an improvement in the efficiency with which domestic goods are produced and priced. We examine a number of ways in which the pricing behaviour of the Australian manufacturing...

Almost a decade ago David Gruen and Geoff Shuetrim constructed a small macroeconomic model of the Australian economy. A comprehensive description of this model was subsequently provided by Beechey <em>et al</em> (2000). Since that time, however, the model has continued to evolve. This paper provides an...