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posted on 03 May 2008 by skirchner in Economics, Financial Markets

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Fiscal policy has been and will remain irrelevant to inflation and interest rate outcomes, which are a function of loose monetary policy and developments in global capital markets.

Ok, so lets say Swannie decides to hand back the entire surplus as tax cuts.  I struggle understand how injecting $20 odd billion into the economy would not have some inflationary impact.

Posted by .(JavaScript must be enabled to view this email address)  on  05/03  at  09:24 PM

Alternatively, if the Govt was really serious about reducing inflation (ie. excess money in the economy) it could take that $31bn and simply destroy it!

Set up a big bonfire in front of Parliament House.

Posted by .(JavaScript must be enabled to view this email address)  on  05/06  at  09:52 PM

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