Was Demand Growth Unsustainable in 1988/89?

Untitled

“…Australians had done no more than spend the additional income that a rise in the terms of trade had provided. In any case, if the concern was excessive demand growth relative to output, then tighter monetary policy was not the correct prescription as this would increase net capital inflow (as it did) and thereby increase demand relative to output (White, 1991).…”