Monetary Policy: RBA, Cash Rate and Transmission Mechanisms

What this note covers

1. The Reserve Bank of Australia: Role and Mandate
2. The Cash Rate and Open Market Operations
3. The Cash Flow (Disposable Income) Transmission Channel
4. The Asset Price (Wealth Effect) Transmission Channel
5. The Exchange Rate (Net Exports) Transmission Channel
6. The Credit (Availability of Lending) Transmission Channel
7. From Transmission Channels to Macroeconomic Objectives: Putting It All Together

7 sections · 14 key terms & formulas · 6 common mistakes