The Reserve Bank is warning that Australia could be heading towards a period of stagflation, a devastating economic condition characterised by high unemployment, high inflation and low economic growth. With the postwar consensus well and truly broken, would this usher in a new economic orthodoxy?
If the oil supply shocks from the US-Israel war in Iran continue for much longer, the RBA will have to walk a fine line to avoid the worst impacts of a recession, let alone stagflation.