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RBA Glossary definition for inflation target

inflation target – A tool to guide monetary policy expressed as a preferred range or figure for the rate of increase in prices over a period. In Australia, the inflation target is between 2 and 3 per cent per annum on average over the course of the business cycle.

RBA Glossary definition for inflation

inflation – A measure of the change (increase) in the general level of prices.

Search Results

BA-MARTIN in Detail

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
We assume that, when banks' capital adequacy ratios fall below target (i.e. ... In their framework, capital ratios return to target around 2–3 years from the downturn.
https://www.rba.gov.au/publications/rdp/2022/2022-01/ba-martin-in-detail.html

Conclusion

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
Having a banking sector within a macroeconomic model permits assessment of the potential complementarities or trade-offs between the RBA's inflation and full employment objectives and its financial stability objective. ... For example, a countercyclical
https://www.rba.gov.au/publications/rdp/2022/2022-01/conclusion.html

Online Appendix

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
are the neutral real interest rate and inflation expectations variables in MARTIN, the exogenous component of the mortgage spread to funding costs ( s. ... π. is the inflation target. w. t. =. w. (. 1.
https://www.rba.gov.au/publications/rdp/2022/2022-01/online-appendix.html

MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
We assume that, when banks' capital adequacy ratios fall below target (i.e. ... In their framework, capital ratios return to target around 2–3 years from the downturn.
https://www.rba.gov.au/publications/rdp/2022/2022-01/full.html

How Does the Pass-through of Monetary Policy Change with the State of the Economy?

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
In our example, capital returns to target around the same time as losses normalise, such that pass-through does not move below 100 per cent. ... Figure 15 shows the responses of unemployment and inflation to the same exogenous changes in the cash rate as
https://www.rba.gov.au/publications/rdp/2022/2022-01/how-does-the-pass-through-of-monetary-policy-change-with-the-state-of-the-economy.html