Glenn Stevens: challenges for economic policy

The Reserve Bank governor spoke to the Anika Foundation Luncheon in Sydney on July 22 on the challenges still facing a recovering Australian economy.

Thank you for once again coming to support the Anika Foundation, on the eighth of these annual fundraising occasions.

Once again my topic is “challenges for economic policy”. It always seems as though there are some challenges to talk about.

The challenges I want to focus on are those involved in dealing with and then recovering from the financial crisis that enveloped the major European countries and the United States (US) (and, briefly, the whole world) in late 2008. My view is that policies were very effective in averting a potential catastrophe five years ago. But fostering a strong recovery has been much more difficult. I think this reflects the nature of the shock policymakers have been dealing with. We have learned, once again, about the limits to what monetary policy alone can achieve.

I wish to be clear at the outset that my remarks today are about global issues, and contain no particular message specific to Australia.
I begin with some remarks on the crisis itself.

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