I wrote this for a Guardian panel. The published version was cut for space reasons, so here’s the full version The central concern expressed by the Reserve Bank in defending its high-inte…

The central concern expressed by the Reserve Bank in defending its high-interest rate policy is that expectations of higher inflation may become entrenched, requiring a further, more painful round of contractionary monetary policy in the future.

By contrast, the RBA expresses no concern that the reduction in economic growth induced by its policies will lead to a permanent reduction in living standards.