Contradictory Happenings in the Australian Economy

Running head: ECONOMIC PRINCIPLES
Economic Principles
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1ARTICLE REVIEW
Table of Contents
Article 1......................................................................................................................................2
Article 2......................................................................................................................................4
References..................................................................................................................................6

2ARTICLE REVIEW
Article 1
RBA baffled by the 'tension' between a weak economy and strong employment
Stephen Letts
14 April 2019
ABC News
The article has emphasized on the Reserve Bank of Australia’s view regarding the
contradictory happenings in the economy of Australia. It is reported in the article that Dr.
Debelle, the Deputy Governor of RBA is confused with the fall in unemployment rate in
Australia during the period of its recent slow economic growth, which is not at all expected
as far as economic theories are concerned (ABC News 2019). This trend is now going on in
Australia for a long period and pulled down the cash rate at 1.5 percent low. It has been
argued in the article that fall in unemployment rate might have happened due to less
participation of people in the labour force.
It is quite surprising to observe that even with weak job growth; unemployment rate
fell below 5 percent and recorded as the lowest in the last eight years. According to Dr.
Debelle, the business firms in Australia had invested in the end of 2018 and continued the
investment trend in 2019 too and along with that kept on recruiting. Thus, Dr. Debelle argued
that if the economic growth had been so low why would the firms make positive investment
decisions. As per the article, Dr. Debelle seemed very much positive with the economic
growth of Australia and hoped that it will improve soon and push the wages up leading to
consumption rise (Lavoie and Stockhammer 2013). The RBA has expressed its willingness to
change their monetary policy if required; however, Dr. Debelle indicated that it might not be
needed. According to Sally Auld of JP Morgan, the contradicting scenario of Australian