Discussion of Perspectives on the Australian Policy Framework

These are three quite different papers, from very different perspectives. John Quiggin adopts a micro approach; Warwick McKibbin’s views are informed by research on optimal policy regimes in large-scale macro models, while Peter Stemp’s comments are mainly based on the literature which deals with institutional structure and incentives for monetary policy. I want to respond to a couple of points raised by each author, and then end by suggesting three questions – one from each of the papers – on which discussion might focus. I am going to talk about the three papers in the order in which I read them, which is not the order in which you have heard them today.