Inside the Economist’s Mind

Can unemployment ever be too low? In this episode, we explore the Non-Accelerating Inflation Rate of Unemployment—or NAIRU—a key economic concept used to gauge how low unemployment can go without triggering rising inflation. You'll learn how the NAIRU helps central banks like the RBA make informed monetary policy decisions, and why it's central to debates about full employment and price st...

Unemployment is more than just a headline figure—it’s a window into the health of the labour market and the economy. In this episode, we break down how the unemployment rate is measured in Australia by the ABS, and what it tells us about who's working, who's not, and why. We explore the key types of unemployment—cyclical, structural, and frictional—and explain related concepts like underem...

What exactly is productivity, and why does it matter so much in economics? In this episode, we demystify productivity by exploring its two key forms—labour productivity and multifactor productivity (MFP)—and explain how they’re measured using real-world methods from the ABS. Learn how economists calculate output and inputs, the challenges involved in productivity measurement, and the crucial role...

What causes economies to boom and bust? In this episode, we break down the business cycle—its phases, causes, and consequences—and explore what defines a recession versus a depression. We examine different ways recessions are identified, including the technical definition and the broader NBER approach, and look at historical examples from Australia. You'll also learn about the long-term impact...

What drives a nation's economy forward? In this episode, we take a deep dive into the concept of economic growth , focusing on Gross Domestic Product (GDP) as the key measure of progress. You'll learn how GDP is calculated through the production, income, and expenditure approaches , and why adjusting for inflation with real GDP is crucial. We explore the dynamics of aggregate demand —from...

What exactly is inflation, and how do we measure it? In this episode, we dive into the Consumer Price Index (CPI) —Australia’s main tool for tracking inflation. We explain how the Australian Bureau of Statistics (ABS) builds the CPI using a basket of goods and services, how item weights reflect household spending, and how prices are collected. You'll also learn about underlying inflation measu...

What’s behind Australia’s 2–3% inflation target—and why does it matter? In this episode, we break down the Reserve Bank of Australia's inflation target , how it's measured using the Consumer Price Index (CPI) , and why keeping inflation within this range helps ensure price stability and full employment . We explore how the RBA uses monetary policy , like adjusting the cash rate , to respon...

In this episode, we unpack the key causes of inflation and explore how rising prices can stem from different sources. We delve into the three main types of inflation: demand-pull , cost-push , and inflation expectations , and explain how shifts in supply and demand, production costs, and consumer sentiment all play a role. We also examine how imported inflation via exchange rate changes can impact...

In this episode, we explore the evolving role of central banks when traditional tools no longer suffice. While conventional monetary policy typically relies on adjusting interest rates to steer economic activity, crises like the Global Financial Crisis and the COVID-19 pandemic forced central banks to think outside the box. Join us as we unpack key unconventional monetary policy tools—such as forw...

In this episode, we take a deep dive into how the Reserve Bank of Australia (RBA) implements monetary policy, focusing on its primary pre-pandemic tool: the cash rate target. We unpack how the cash market functions, looking at the role of Exchange Settlement (ES) balances, the policy interest rate corridor, and how these mechanisms help keep the cash rate aligned with the RBA's target. We also...

In this episode, we explore how monetary policy decisions by the Reserve Bank of Australia (RBA) ripple through the economy, shaping interest rates, economic activity, and ultimately, inflation. We break down the two key stages of the monetary policy transmission process and highlight the crucial role inflation expectations play in this complex mechanism. Why do wage demands rise when inflation is...

This podcast explores monetary policy in Australia, focusing on the role of the Reserve Bank of Australia (RBA). It delves into the RBA's key objectives: achieving price stability, specifically aiming for consumer price inflation between 2 and 3 per cent , and maintaining full employment where people available and wanting to work can find jobs. The RBA primarily implements monetary policy by s...

Economists are often portrayed in the media as forecasters of financial markets or inflation predictors. While those roles do exist, the real work of economists is far broader, deeply analytical, and spread across diverse sectors. This overview provides an in-depth look at the variety of career paths available to economists .