The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, July 28, 2011

David Llewellyn-Smith correction

DLS, who posts under the name Houses and Holes over at the Macro Business blog, incorrectly stated that I "called" a May hike. He has now acknowledged this mistake and fixed it. At the time, I clearly stated that while I thought the RBA “should” raise rates in May, it probably would not. I argued that subject, crucially, to them receiving further validating data flows, June was more likely (noting that I disagreed with the delay). Of course, the RBA did not receive the supporting data, and got caught short by the next CPI print, as I correctly predicted was a risk. History repeated itself (with respect to the 2006-07 rate setting mistakes the RBA now recognises), as I have argued was the hazard here. Regrettably the risk is very much that the RBA neglects its only objective--price stability--in the name of not rocking the growth boat. The problem with this logic is that Australia could get high inflation in a low growth environment.