Published: February 27, 2019
Forget an interest rate increase any time soon, there is plainly no heat in the economy
On Friday a small but significant shift occurred in the Australian economic firmament. While appearing before the house economics committee, the governor of the Reserve Bank, Philip Lowe, announced that he believed the non-accelerating inflation rate of unemployment (Nairu) had a 4 in front of it.
The Nairu is a fairly economic wonky term for what is otherwise referred to either as the natural rate of unemployment or full employment. The reason why it is now mostly referred to as the Nairu is because terms like natural rate or full employment suggest a finality which most politicians or policy makers would not wish to subscribe.
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