All the talk of interest rates during the Australian Federal election is getting boring. Its almost irrelevant anyway (in my view). Broadly speaking, interest rates are beyond the control of Governments. Yes, the ability of a Government to manage the economy determines interest rates but macro economic factors are more significant influencers.
It will be a travesty if the Liberal Party stays in Government – they are fighting a negative campaign and seem to have very little to show for more than ten years of Government, apart from a strong economy. They can’t legitimately claim responsibility for this either.
The election should be fought over fundamentals; issues that Governments actually have a direct influence such as education, sustainability, civil rights, industry, innovation and public services.
3 responses so far ↓
L.A. // October 29, 2007 at 12:56 pm |
“interest rates are beyond the control of Governments.”
Actually, interest rates are now the main instrument of monetary policy that the authorities have. Although I agree that there must be more presseing issues like education, where debate is much more interesting than interest rates.
Daniel // October 30, 2007 at 2:36 am |
Perhaps my point wasn’t clear. Governments control interest rates but the decisions that they make in relation to interest rates are influenced or determined by external factors, such as inflation, the business cycle and credit risk.
L.A. // October 30, 2007 at 12:16 pm |
Oh, absolutely. I’m sorry I misunderstood your original post!
I still find it very odd that they are talking so much about interest rates in an election.