can MP be refered to as non./discretionary? (1 Viewer)

[coroneos]

Like is it incorrect to say that MP is a discretionary or non-discretionary action by the RBA/Govt.

I know that you can use (non)or discretionary to describe FP, but what about MP?

 

[Newbie]

erm.......i think its discretionary.........well its an optimistic assumption that the RBA is still in control of rates

 

[coroneos]

Originally posted by Newbie
erm.......i think its discretionary.........well its an optimistic assumption that the RBA is still in control of rates

Are you sure it can be classified as discretionary? Can't we only refer to something as being non-discretionary or discretionary when we are describing the cyclical/structural components of the federal budget??

 

[timmii]

monetary policy is discretionary in that the RBA does determine what the i.r's will be. I suppose if u wanted to be all philosophical about it, u could say that interest rates that actual prevail in the market can be non-discretionary depending on bond yields etc...but thats not monetary policy per se...

So yeah, u would never have to refer to MP being discretionary/non-discretionary. The reason u have the distinction with fiscal policy is that some components of the budget result from what the government *chooses* to do in pursuing its own political/social/economic agenda, and some (e.g automatic stabilisers) come about as a result of economic conditions, that the government has not actually made a conscious decision to modify/alter revenue/spending there.