Hi
i'm looking at an article and it says "inflation guage boosts case for RBA easing monetary policy"
What does inflation guage boosts mean??
and do you think this matches with the syllabus dot point of economic issues inflation?
thanks
An 'inflation guage' would refer to some type of index that reflects the level of inflation within an economy. The most common known of these might be the consumer price index (CPI) which is the actual target measure inflation used by the reserve bank. However other measures such as the Producer Price Index (PPI) may also provide an indication of the level of inflation within an economy. A range of private sector forecasters release their own indicies that may be based on other items, and are put forward as a 'leading index' for inflation. These 'leading indicies' tend to indicate the level of inflation
before CPI figures are available. This assists firms in pre-empting possible monetary policy decisions.
So the article is most likely refering to one of these indicies that have 'boosted' the case for an easing in monetary policy, although I would suggest this is an older article as the RBA has just recently re-affirmed its commitment to inflation targeting so easing monetary policy in the near term is probably not on the agenda.
