Interest rate hikes were not subduing inflation and risked an economic downturn, according to an economist.
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Australia Institute senior economist Matt Grudnoff said interest rate hikes were not helpful in fighting the kind of inflation prevalent in Australia.
"I think the RBA is risking the economy when it didn't really need to," he said.
"The reason we're in this difficult situation is because we've got a Reserve Bank totally focused just on inflation, not willing to look more broadly at the negative impacts higher interest rates might have on things like unemployment and economic growth."
Inflation is either caused by a lack of supply or lack of demand, Mr Grudnoff said.
Demand side inflation occurs when the economy is booming.
"Interest rate increases are really good at fighting this kind of inflation as rate hikes restrict consumer spending and sucks the demand out of the economy," Mr Grudnoff said.
Supply side inflation is caused when there's a shock to the economic system, such as COVID-19 bottlenecks and Russia's invasion of Ukraine.
"Increasing interest rates with this kind of inflation just further reduces demand and causes more pain but doesn't necessarily treat the underlying symptom, inflation," Mr Grudnoff said.
"For example, if the RBA puts up interest rates, it's not going to change the price of gas, it's not going to change the price of oil, it's not going to reduce shipping costs.
"All it does is make everybody poorer, which can cause prices to come down because people aren't buying anything, but it doesn't treat the underlying cause."
Mr Grudnoff said the RBA was using demand-side inflation tactics to fight inflation caused by supply shortages.
"According to the RBA, if the economy is sitting below the natural unemployment rate of 4.5 per cent, we're going to see these supply labor shortages, you're going to see a rapid rise in wages and you're going to see a rapid rise in inflation as the economy tries to deal with this excess demand," Mr Grudnoff said.
"The problem is, there is no rapid rise in wages, which suggests that what the RBA thinks is happening is not actually happening."
Mr Grudnoff said the Reserve Bank governor is concerned about inflationary expectations.
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"That is, if people think inflation is going to stay high, then they'll start demanding higher wages to compensate for the continually high inflation rate," he said.
"But it's not happening. This isn't the 70s where wages did rise at a rapid rate. Rules and regulations favour business far more now than they did then, so I don't think we're going to see the rise in wages the RBA is fighting against."