History of Economic Policy in Australia*

Abstract

The author recounts notable issues and developments in the Australian federal government's management of the economy over the fifty years since 1974, relying on his knowledge of events he observed as an economic commentator speaking with public servants, academics and politicians and writing several times a week in The Sydney Morning Herald and, for much of that time, The Age, Melbourne. Events include the arrival of stagflation in the early 1970s, the loss of faith in Keynesian remedies, the flirtation with Friedman's monetarism and attempts to control the money supply, the switch from fiscal policy to monetary policy as the dominant instrument for economic demand management, the rising influence of the central bank and the adoption of inflation targeting. Other issues of concern included the balance of payments, the twin deficits hypothesis and the goals of microeconomic reform, since known as neoliberalism. The paper represents reflections from a prominent economic journalist in Australia.