Our Research Agenda
Research sits at the core of policy, providing the rigorous conceptual and empirical foundations needed to navigate complex, evolving challenges and communicate clearly with markets and the public. At the Reserve Bank, this is delivered through a focused multi-year research agenda, strengthened by advanced data, tools, skills and analytical frameworks. The key themes of our monetary policy focused research agenda are outlined below:
Conducting monetary policy in a changing world
We study how monetary policy strategy and tools can best support price stability and full employment as the economic environment evolves, including during periods of stress and heightened uncertainty.
Current focus areas
- Trade-offs between the Bank’s dual mandates and how these evolve as economic conditions change.
- The costs and benefits of alternative monetary policy tools.
How monetary policy affects the economy
We research how monetary policy is transmitted through the economy, including via financial markets, housing and expectations, and how these channels change over time.
Current focus areas
- Transmission through financial channels, including borrowing costs, credit availability, asset prices and broader financial linkages.
- The role of the housing market in transmitting monetary policy to economic activity.
- How central bank communication and actions influence expectations and economic outcomes.
Economic policy and financial stability interactions
We examine how monetary policy interacts with financial stability and fiscal settings, supporting a more integrated approach to macroeconomic policy.
Current focus areas
- Interactions between financial stability and monetary policy, including the effects of macroprudential policy on the economy and monetary policy transmission, and of monetary policy on economic risks.
- Fiscal and monetary policy dynamics.
Labour market and inflation dynamics
We analyse the drivers of inflation and labour market outcomes in Australia, including how firms, households and workers respond to economic shocks and structural change.
Current focus areas
- Firm price-setting behaviour, the passthrough of shocks into inflation and how these processes evolve over time.
- Long-term inflation expectations: their measurement, formation and drivers.
- Dynamics of full employment, including participation, labour flows and matching.
- The macroeconomic effects of climate related disasters and implications for monetary policy.
Data, artificial intelligence and machine learning
We explore how new data sources, artificial intelligence and machine learning can enhance economic measurement, forecasting and policy analysis, while carefully assessing their limitations, robustness and risks.
Current focus areas
- Using artificial intelligence and machine learning to support economic forecasting, nowcasting and policy analysis.
- Incorporating novel and non-traditional data sources, such as high frequency indicators and text based data, to complement traditional economic statistics and inform policy analysis.