conditions of easier funding and help the ability of the financial sector to extend credit. but it can ’ t, for example, add to the supply of land zoned for housing, or improve the responsiveness of the construction sector to demand for additional housing stock. other policies have to do that – and it ’ s important that they do if we are to see easy credit result in more dwellings as opposed to just higher prices for the existing dwellings. monetary policy can ’ t create the additional infrastructure that most people agree we need. funding conditions are not, in fact, an impediment to infrastructure. the real issues are governance, risk - sharing and pricing – areas where other policies have to be right. monetary policy can ’ t directly cause the innovation and technological change that is so important for bis central bankers ’ speeches wellbeing of our citizens over time. other policy areas have to be right – and then the innovators and their backers have to be willing take the necessary risk. as for things that monetary policy should try to avoid, we are also cognisant of the fact that monetary policy does work initially by affecting financial risk - taking behaviour. in our efforts to stimulate growth in the real economy, we don ’ t want to foster too much build - up of risk in the financial sector, such that people are over - extended. that could leave the economy exposed to nasty shocks in the future. the more prudent approach is to try to avoid, so far as we can, that particular boom - bust cycle. it is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that. conclusion the future has no shortage of challenges, but that is hardly new. sensible policies in many areas are needed to help with the required adjustments. that includes monetary policy, within the limits of its powers. a very accommodative interest rate structure, and a degree of stability and predictability, has been in place for some time now. indeed the conduct of policy could perhaps be described as boring. if so, i would regard that as a small success. while the financial markets like to think about almost nothing else than what will happen to interest rates next month, i suspect most people are happy not to have to think about such things, and prefer focusing on issues of more enduring importance for their business or their

27 / 10 / 2017 uncertainty | speeches | rba speech uncertainty guy debelle [ * ] deputy governor 7th warren hogan memorial lecture sydney – 26 october 2017 uncertainty is one of the few certainties in monetary policy decision - making. it enters at nearly every stage of the process – from understanding where the economy is at the moment to knowing where it will be in the future. tonight, i will discuss some of the main ways that uncertainty affects things. in doing so, i will draw on the ‘ superforecasting ’ template described by philip tetlock. [ 1 ] i will also discuss the monetary policy reaction function, which is one area where we can try to minimise uncertainty. in describing these various manifestations of uncertainty, i will outline some forthcoming changes to the way uncertainty is presented in the rba's. the intention of these changes is to portray uncertainty in a form that is usable and understandable. i would also like to statement on monetary policy discourage an excessive focus on false precision. 1. uncertainty about where we are i will start by discussing the uncertainty about the present. it is obviously important to have a good idea of where you are, in order to know where you are going. we do have some sense of where the economy is, albeit imperfect. most of the time, the uncertainty about where exactly we are is not consequential to the setting of monetary policy, but at times it can be. some of the uncertainty relates to the frequency of data releases and the time it takes for data to be collected and published. take the case of output and inflation, two of the most important summary statistics on the economy. it is now late october. but we won't receive an official read on gdp in the current quarter until the december quarter national accounts are released in early march of next year. that's more than four months away. this is by no means intended as any criticism of the abs. it just highlights the challenges of compiling such statistics for an entity as large and complex as the australian economy. http : / / www. rba. gov. au / speeches / 2017 / sp - dg - 2017 - 10 - 26. html 1 / 16 27 / 10 / 2017 uncertainty | speeches | rba for inflation – which is also published quarterly in australia – we won't get an official read on the current rate until the december quarter consumer price index ( cpi ) is released in late january, three months from now.