Some Closing Remarks From Philip Lowe

1. Monetary policy cannot ignore credit growth and asset prices. Central banks cannot target credit growth or asset prices, but they also cannot ignore them. Interest rates directly influence borrowing and asset values, so central banks must work with prudential authorities to manage financial and macroeconomic risk.

2. Lowering interest rates when the economy is growing well and asset prices are surging can lead to increased borrowing and over-valued assets, posing risks of instability in the future. A medium-term focus and policies other than monetary policy can help ensure inflation is consistent with the target.

3. Australia’s high housing prices are not solely due to interest rates but are a result of societal choices. Factors such as where people live, city design and zoning, transportation systems, and land and housing investment taxation contribute to high urban land and housing costs. Addressing these issues is crucial to tackling the high cost of housing in Australia.

4. Strong and credible frameworks for economic policy, coordination between monetary and fiscal policy, and efforts to boost productivity growth are important pillars for economic stability and growth.

5. Effective communication in the social media and digital age is challenging, but it is essential to provide factual information and foster informed and nuanced debate rather than personal attacks and clickbait. Both policymakers and the media have a responsibility to ensure the public square is filled with accurate information and thoughtful discussions.

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