Steven Kennedy - Sir Leslie Melville Lecture 2022

A tale of two crises: reflections on macroeconomic policy responses to the GFC and the pandemic

The 2022 Sir Leslie Melville Lecture by Dr Steven Kennedy PSM

Australia avoided calamitous outcomes during the Global Financial Crisis and the pandemic due to the scale and speed of policy response – the scarring costs foregone are large. The response to the pandemic was tailored to the nature of the shock, but lessons learnt from the GFC (and the recession of the 1990s) were important in shaping the tone and character of the economic response. There was effective coordination between fiscal and monetary policy in both crises, with the pandemic notable for the primacy of fiscal policy instruments. Looking ahead, fiscal policy may play a more prominent role than monetary policy in responding to future crises but the form it takes will depend upon the nature of the crisis.

View the presentation notes here.