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Macroeconomic Policy - inflation. unemployment and growth.
Question For a decade or more, macroeconomic policy in Australia seems to have been directed primarily at controlling inflation in the belief that success in achieving this target would be associated with macroeconomic stability and growth. Following the Global Financial Crisis the main emphasis of macroeconomic policy has been on trying to avoid a recession. Contrast these two phases of policy and explain how macroeconomic policy objectives, targets and instruments have differed.
In order to complete this task you should:
1. Outline the experience of the Australian economy over the last 10-15 years, making use of major macroeconomic aggregates - these may be presented in summary tables and/or graphs. Stress should be placed on the challenges facing policy makers at present and likely challenges in 2012 (700 words)
2. Discuss the concept of 'instruments and targets' in macroeconomic policy and assess how this concept might be applied to the current policy framework in Australia.
3. Show how the economic theory you have learnt can be used to explain current macroeconomic policy
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