ECON11026: Macro Economy and Stabilisation Policy- Macroeconomic Environment in Australia- Essay Writing Assignment

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Essay Writing Assignment:

Task: Discuss the current macroeconomic environment in Australia whilst critically evaluating the role of monetary policy as a stabilisation tool. Australia has experienced an unprecedented economic growth, achieving the longest economic expansion on record (27 years) without recession. It also escaped the Global Financial Crisis relatively unscathed and pulled off the end of the mining boom. These credentials hide some of the underlying structural issues lingering on in the Australian economy. Among them are the rising property prices and housing affordability, a sluggish economy, a stagnant wage growth rate, rising household and government debt, a rapidly declining manufacturing sector, and concerns of job security amidst of mass automation. In this economic environment, the role of macroeconomic policy cannot be ignored. Particularly, the recent monetary policy stance adopted by the Reserve Bank of Australia has left the official cash rate at its historic low of 1.5 per cent for the thirteenth consecutive month. In this essay, you will discuss the recent trends of macroeconomic indicators and critically evaluate the role of monetary policy including its strengths and weaknesses as a stabilisation tool of a modern economy.