Reserve Bank of Australia

Changes in supply and demand can change the price of a good or service. Typically, an increase in supply causes the price to fall, whereas an increase in demand causes the price to rise. Economists are often interested in estimating how much price changes are driven by supply or demand ‘shocks’. This was a particularly important question following the COVID-19 pandemic and the rise in inflation in many advanced economies – was this due to supply or demand factors? And depending on the answer, how should monetary policy respond? The contributions of supply and demand shocks can be estimated using econometric models. One popular approach requires making assumptions about how the economy works and one of these assumptions is that supply curves are upward sloping and demand curves are downward sloping (‘sign restrictions’). There is general agreement that this assumption is correct, but it does not allow us to exactly estimate the contributions of shocks. Instead, it only allows us to say that the contributions lie within a range. Our researcher aimed to clarify what we can learn about the contributions of shocks to price changes when making assumptions about the slopes of supply and demand curves. Read the paper to learn more: https://bit.ly/3Mdkv9S Want to get to know our researchers? Check out our Researcher Profiles: https://bit.ly/3yK2IEb

Governor Michele Bullock and other senior staff are appearing today before the House of Representatives Standing Committee on Economics. The hearing began with the Governor delivering an opening statement, followed by each Committee member asking a series of questions about the Bank's work and the economy. Read the opening statement: https://bit.ly/4fK9f2p

We're recruiting graduates for our 2025 Graduate Program who are keen to learn a different side of central banking supporting public policy though the critical payments infrastructure we operate. Join our team and you'll be set up for success with all the support and development you need on your graduate journey. Apply now: https://bit.ly/3M875vQ

Our Payments System Board held its quarterly meeting today. Members discussed a range of issues including the annual Assessment of the ASX clearing and settlement facilities against the Financial Stability Standards, oversight of international financial market, Competition in the debit card market and more. Read the media release: https://bit.ly/4fGxC0Z #RBA #Payments #PaymentsSystemBoard

Deputy Governor Andrew Hauser spoke at the ESA Business Lunch in Brisbane yesterday about the risks of overconfidence in economic commentary and ways in which central banks can avoid falling prey to it in our own deliberations Read, watch or listen to his speech online: https://lnkd.in/gva_d_2K

Governor Michele Bullock spoke at the Rotary Club of Armidale yesterday about the context for this week's Board decision as well as economic conditions, challenges and opportunities in regional Australia. Read, watch or listen to her speech online: https://bit.ly/4dhgw87

Congratulations to Sharon Draper, who has been awarded this year's Premier's RBA Economics Scholarship. Sharon, who is a head teacher at Calrossy Anglican School in Tamworth, will use the scholarship to examine the conditions necessary to draw more students to study economics in rural and regional schools. Learn more about the scholarship here: https://bit.ly/3WCYCFN #PremiersTeacherScholarships #RBA #RBAEducationProgram #Economics

Our Statement on Monetary Policy sets out our assessment of current economic and financial conditions as well as the outlook that the Reserve Bank Board considered in making its interest rate decision. Read the August SMP – https://bit.ly/4cmufJA

ICYMI - Governor Michele Bullock explained the Reserve Bank Board's monetary policy decision and answered questions from media yesterday afternoon. Watch it here: https://bit.ly/3LUiFdV

At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35 per cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25 per cent – https://bit.ly/4cdIfWe