One of the forgotten aspects of the 1990s recession is that when inflation was falling the RBA was madly cutting rates in a desperate attempt to prevent a recession.One of the forgotten aspects of the 1990s recession is that when inflation was falling the RBA was madly cutting rates in a desperate attempt to prevent a recession.t seems that some people really want a recession.
Calling for a short recession for the good of the economy is a bit like calling for a small war to teach another country a lesson. They never end up being small or short and the people calling for them invariably know they will not have to suffer. In essence we want to avoid what happened in the 1990s, when killing inflation involved destroying the economy.
One of the oft-forgotten aspects of the 1990s recession is that when inflation was falling the RBA was madly cutting rates in a desperate attempt to prevent a recession:Throughout 1990, 1991 and 1992 the real problem wasn’t slowing inflation but trying to stave of a deep recession.Inflation, rather than reaching 3% and realising – as though through osmosis – that it should stabilise, just kept dropping – hitting 0.3% at the end of 1992.
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