RBA’s Lowe says monetary policy can push up asset prices but can’t deliver medium-term growth

Lowe at Jackson Hole

RBA Governor Philip Lowe used his speech at Jackson Hole to prod governments to do more for growth.

“We are experiencing a period of major political shocks,” he said. “Political shocks are turning into economic shocks.”

He warned that central banks have a limited and partly exhausted arsenal of tools to fight back.

“Monetary policy cannot deliver medium-term growth,” Lowe said. ” We risk just pushing up asset prices.”

Instead, he called for investment in infrastructure and structural reforms.

This is the same sort of thing the ECB and BOJ have been saying for years but with everyone headed to the zero-bound, expect to hear much more of it in the years ahead.


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