- The Reserve Bank has written a neat seven-page summary of how its open market operations work.
- For an example of the factors the Reserve Bank takes into account in making its decisions, see its most recent March statement.
- Some have advocated a return to the gold standard, a policy opposed by most economists and central banks. The debate is well covered by Wikipedia.
- In Australia, Nicholas Gruen has suggested that we might also use fiscal policy to smooth the cycle. ACOSS held a conference on this some years ago. In the proceedings, Nicholas’s proposal is at page 18, and several critics have their say.
- Paul Krugman’s baby-sitting co-op article is a beautiful lead-in to understanding monetary policy.
- This paper from the US Congressional Budget Office discusses the tricky issue of measuring "potential output".
- Last night, I glossed over some of the details of reserve ratios in Australia. Since 1999, reserve ratios have been replaced by the rule that banks must pay a levy to the Australian Prudential Regulation Authority. By contrast, US banks are still subject to a 10% required reserve ratio.
Quiz 6 (and answers) are now up on the course website.