Questions on notice and questions in writing

Q No. Members Questions Response
QON1 Mulino Can you please provide an estimate of the impact on GDP from coronavirus and the drought and the net impact on GDP growth of terms of trade being above the long-term average and of the mining sector going into expansionary mode?

Response to Questions 1-6


QW2 Leigh In his book “Narrative Economics”, Robert Shiller argues that our narratives about the macroeconomy can be critical. According to the RBA’s liaison program, what are the main competing narratives about the Australian macroeconomy? Has the RBA sought to shape these narratives?  
QW3 Leigh In recent years, what research has the RBA conducted quantifying the aggregate costs and benefits of lowering interest rates below current levels? How are these quantitative results affected by macro prudential policy?  
QW4 Leigh Financial regulators have policies, such as the counter-cyclical capital buffer, that are explicitly designed to reduce the risks of an over-expansion of credit.1 Compared to variations in monetary policy, would an increase in the counter-cyclical capital buffer (or changes in other prudential controls) reduce the risks posed by credit growth with a smaller cost in higher unemployment?  
QW5 Leigh The Bank has said previously that it is concerned that high levels of indebtedness may cause household spending may react strongly to a downturn in income or asset values.2 What research has the Bank done on the likelihood of such a downturn and the size of macroeconomic effects?  
QW6 Leigh Academic research suggests that the effects of such a downturn would be small.3 Why does the Bank disagree?

1. APRA, Countercyclical capital buffer, Published 11 December 2019.

2. Commonwealth of Australia, Official Committee Hansard, House of Representatives Standing Committee on Economics, Reserve Bank of Australia annual report 2016, 24 February 2017 and Philip Lowe, ‘Household Debt, Housing Prices and Resilience,’ Economic Society of Australia (QLD) Business Lunch, 4 May 2017.

3. Frederic S. Mishkin, ‘Housing and the monetary transmission mechanism,’ Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, 2007, pp. 359-413.

Committee Secretariat contact:

Committee Secretary
Standing Committee on Economics
PO Box 6021
Parliament House
Canberra ACT 2600

Phone: (02) 6277 4587

About this inquiry

The Standing Committee on Economics, which can inquire into and report on any annual reports referred to it by the House of Representatives, has agreed to undertake an inquiry into the 2019 Annual Report of the Reserve Bank of Australia.

Past Public Hearings

07 Feb 2020: Canberra


Inquiry Status

Report tabled


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