reserve bank

The call from powerful South Australian Senator Nick Xenophon and economist Danny Price to extend the Reserve Bank's mandate to nominal growth targeting is an attempt to import a foreign solution to foreign problems.

Xenophon and Price want the RBA's current mandate -- an inflation rate of 2-3%, on average, over the cycle -- extended to include nominal GDP growth, to reflect the fact that nominal GDP growth has been persistently flatter for a number of years since the financial crisis, with attendant impacts on government revenue and wages growth.