RBA flags rising inflation concerns, but IMF study suggests Australia's wage-setting changes reduce wage-price spiral likelihood.
The RBA has flagged concerns about rising inflation expectations, but the International Monetary Fund study suggests wage-price spirals are less likely due to significant changes in Australia's wage-setting system. These changes include the introduction of modern awards, the Fair Work Act, and a decline in union membership, reducing workers' bargaining power and wage-price spiral likelihood. No evidence suggests an emergence of a wage-price spiral in present circumstances.
August 18, 2024
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