Reserve Bank of Australia
NBER Working Papers and Publications
|March 2011||Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study|
with Paul Bloxham, Michael Robson: w16845
The long-running debate about the role of monetary policy in responding to rising asset prices has received renewed attention in the wake of the global financial crisis. This paper contributes to this debate by describing the Australian experience of a cycle in house prices and credit from 2002 to 2004, and discussing the role played by various policies during this episode. In particular, it focuses on the efforts by the Reserve Bank of Australia to draw attention to the risks associated with large, ongoing increases in housing prices and household borrowing.