Conquering Fear of Floating: Australia's Successful Adaptation to a Flexible Exchange Rate

July 1, 2007

Preview Citation

Format: Chicago

Craig Beaumont, and Li Cui. Conquering Fear of Floating: Australia's Successful Adaptation to a Flexible Exchange Rate, (USA: International Monetary Fund, 2007) accessed December 23, 2024

Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Australia has enjoyed fifteen years of uninterrupted economic expansion since 1992 despite shocks such as the Asian crisis in 1997-98 and the information technology bust in 2000-01. This resilient economic performance owes much to wide-ranging structural reforms and the improved frameworks for monetary and fiscal policies that were implemented after the Australian dollar was floated in 1983. In addition to gaining the expected macroeconomic benefits from exchange rate flexibility, the float appeared to help motivate and facilitate the subsequent reforms. Australia's experience with adapting to a floating currency may therefore be of broader interest.

Subject: Exchange rate adjustments, Exchange rate flexibility, Exchange rates, Floating exchange rates, Foreign exchange, International trade, Terms of trade

Keywords: Bank bill, Exchange rate, Exchange rate adjustments, Exchange rate development, Exchange rate expectation, Exchange rate flexibility, Exchange rate volatility, Exchange rates, Fiscal, Flexible, Floating, Floating exchange rates, Global, Headline CPI inflation, Inflation, Interest rate, Macroeconomic Stability, Monetary, Monetary policy, PDP, RBA control, RBA governor, RBA judge, Structural Reform, Terms of trade, Terms of trade shock

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 2007/002
Stock No:

PPIEA2007002
ISBN:

9781451975383
ISSN:

1564-5193

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