The paper "Macroeconomic Policy in Australia" is a perfect example of a micro and macroeconomic case study. Australia’ s plentiful and diverse natural resources attract great levels of foreign investment and also encompass extensive reserves of coal, iron ore, copper, gold, natural gas, uranium and renewable energy sources. A series of main investments like the US$40 billion Gorgon Liquid Natural Gas project will considerably expand the resources sector. Australia also possesses a large service sector and is a significant producer of natural resources, energy and food. The key doctrines of Australian’ s trade policy involve support for open trade and the flourishing culmination of the Doha round of multilateral trade. Economic growth The Australian economy grew for 17 successive years until the global crisis.
Consequently, the Rudd government launched a fiscal stimulus package valued at over US$50 billion to make up for the effect of the slowing economy all over the world and the Reserve Bank of Australia slashed interest rates to historic lows. These policies - and unrelenting demand for property, particularly from China - helped the Australian economy bounce back after just one-quarter of negative growth.
The economy expanded by 1.5% during the first three quarters of 2009 - the best performance in the OECD. In late 2009, unemployment levels which were anticipated to hit the levels of 8-10% hit a peak of 5.7% and had already dropped to 5.3% by February 2010. As a consequence of the enhanced economy, the budget deficit is anticipated to peak below 4.2% of GDP. Challenges facing policymakers in the year 2010 Some of the challenges facing policymakers in the recent past concerning the economy include low world real interest rates, falling prices of investment goods and the rise in China and India and their influence on commodity prices.
The world real rates in the interest have halved since the 1990s as a result of lower world inflation, a drop in investment in goods and high rates of saving in China as well as other Asian countries.
Bartolotti, N., 2006, Inflation, fiscal policy and central banks. Nova Publishers, New York.
Bernanke, B., 2007, Principles of macroeconomics, McGraw-Hill/Irwin. Sydney.
Blinder, A, S, 2008. Macroeconomics: Principles and Policy, Cengage Learning, New York:
Australian Economic Review; June, Vol. 40 Issue 2, p216-224.
Dornbusch, R, 2006. Macroeconomics, McGraw -Hill Australia, Sydney.
Hart, J, A, 2009, The Politics of International Economic Relations, Cengage Learning, New York.