looked like it was building, it had not strengthened sufficiently by the time of the july meeting to warrant action. in august the case got weaker, and it got weaker again by early september. essentially what happened was that the risks to growth from abroad abated, while those posed by the rapid rise in debt did not. this recent experience, and the one a year earlier, is instructive in the discussion about central bank communication. what it shows is that, while it is natural for market participants and the media to want central banks to say more and more about their intentions, people need to keep very much in mind that our assessment of what we might need to do is, of necessity, highly conditional on a view of the future. and the future often turns up the unexpected - to which we need to respond by revising our intentions. so it is important that observers not only listen to the central bank ’ s words, but also continue to look closely at the actual information coming in. i know the majority of you do. secondly, because the future cannot be known, and because things can change quickly, people need some understanding of the principles which guide central bank behaviour. so there is probably more to be gained by continued efforts at articulating how our framework for policy works, than by providing ever more frequent commentary on events. such information hopefully provides interested observers with a device to filter, in real time, the information becoming available. this, combined with a periodic account, after the event, of how we filtered it, is the most helpful form of transparency - describing how we think about things and, within that framework, why we did what we did. the most recent statement on monetary policy, in fact, goes a good deal further down this track than most of its predecessors. conclusion the world economy is still not entirely in the clear, but is better than it was, and a fair bit better than it might have been. it is sensible at present to look for further improvement, while keeping in mind the possibility of regression. if things work out acceptably well abroad, the australian economy will next year have a better chance of balanced growth than we have had for a few years. we will continue to assess the evolving balance of risks and will respond, in a measured fashion, as needed - and we ’ ll do our best to keep you informed.

the required amounts were quickly disbursed ), these countries have received much smaller disbursements : thailand - us $ 8½ billion ; korea - us $ 13 billion ; and indonesia - us $ 3 billion. one reason why mexico received a quick disbursement of assistance to offset the capital flight was the nature of the foreign debt. it was largely sovereign debt ( tesobonos ), and there was little debate ( at least beforehand ) that it should be paid out in full. the usa / imf money made this possible. when it came to asia, none of the short - term debt was sovereign, so there was, initially, no specific plan to pay it off. the hope was that the announcement of the packages would, itself, instil new confidence so that creditors would roll over their debt ; 20 these countries may well be headed for the same sorts of negative growth rates that mexico faced in the first year after the crisis. if so, the deceleration in the growth rate is significantly greater, because mexico had been growing at around 3 - 4 per cent, whereas these countries grew at 7 - 8 per cent ; mexico had the advantage of being next to the large and growing us market, whereas asia ’ s crisis comes at a time when the us growth is at the mature phase of the cycle, and japan is still stagnant ; in terms of wages, a significant real depreciation remains. contrast this with the mid 1980s in australia, where, despite the loss of confidence and concerns about the current account deficit, the inflow continued at more than its historic average. with korea close to default in late december 1997, the american authorities stepped in ( with the imf ) to broker a rollover for bank - to - bank debt, which included a guarantee by the korean government. - 10 - • as in mexico, these countries have very quickly ( almost immediately ) corrected their current account deficits, by reductions in imports stemming largely from the slowing of gdp ; mexico began with a much more clearly over - valued exchange rate ; if asian exchange rates do not recover, these countries seem headed for very substantial inflation ( particularly indonesia ). mexico was probably more able to handle this, as it had had plenty of recent experience with inflation. the asian countries have had relative price stability for many decades ; the unfinished business of rescuing the financial systems of thailand and indonesia have already absorbed the sorts of money mexico used to support its financial sector ( i