The impact of the global crisis was milder in Australia than in other advanced economies owing to strong demand from Asia and decisive policy responses. Australian banks were resilient to the global crisis, and the labor market was flexible in the face of the shock. The exit from fiscal stimulus...

Economic growth is strengthening, stimulated by the high terms of trade. Monetary policy has been tightened appropriately. A flexible monetary policy response to potential external shocks, including commodity price swings, will help to cushion growth while preserving low inflation. To promote...

This 2009 Article IV Consultation highlights that following a prolonged expansion, reflecting sound macroeconomic policies and favorable terms of trade, global events have slowed Australia’s economic growth well below trend. The turmoil sparked by the collapse of Lehman Brothers in September...

This 2005 Article IV Consultation highlights that Australia has implemented wide-ranging structural reforms and strengthened the frameworks for monetary and fiscal policies over the past two decades. As a result, Australia’s economic expansion is now in its 14th year, with growth averaging...

This Selected Issues paper reviews how Australia’s economy has adapted to a flexible Australian Dollar. The paper provides a background on the float and the initial policy challenges. It discusses the main elements of the Future Fund proposal, and estimates how much Australia and other...

This paper analyzes likely effectiveness of the fiscal policy in supporting aggregate demand in Australia. The simulation analysis illustrates that the type of fiscal measure and the underlying behavioral responses have an important impact on the magnitude of fiscal multipliers. The Global...

The Article IV Consultation discusses that recently a commodity price boom, driven by robust global demand, has pushed the Australian economy up against capacity constraints. Banks are adjusting the structure of their funding in response to the turmoil, increasing liquidity, and lengthening the...

This Selected Issues paper on Australia highlights the IMF’s new Global Integrated Monetary and Fiscal Model (GIMF), which is used to examine the macroeconomic implications of alternative fiscal responses to higher revenue. Lower labor and capital income taxes, along with higher public...

This Selected Issues paper examines financial linkages and the correlation between Australian and U.S. output. It shows that the financial linkages have played an important role in conveying shocks from the United States to the Australian economy, and that these have become increasingly...

This Selected Issues paper for Australia highlights the dynamics of the Australian real exchange rate and its impact on Australia’s trade. The main findings are that the Australian real exchange rate is largely driven by world commodity prices and that it adjusts relatively rapidly to large...