In the current RBA Bulletin a number of issues have been explored include wealth distribution, bank funding costs and the performance of state and territory economists. And fortunately there have been some clear conclusions coming out from the research.

On wealth, the RBA economists found that there has been a more even distribution of wealth over the past four years. On bank funding costs, the simple conclusion was that “Over the past six months, lending rates have generally fallen by more than funding costs.” And on the economic performance of states, the Reserve Bank has acknowledged the two-speed economy, noting that mining investment has fuelled spending growth in resource-dependent states. But the Bank says that the pace of activity across non-resource states has been fairly uniform.

Quite simply, if you want to know what really has happened with bank funding costs and interest rates, then you will read the Reserve Bank paper.

Certainly you wouldn’t be taking your information from consumer groups, interest groups or politicians. The Reserve Bank paper is the only independent, clearly written and reliable discussion on issues like interest rate margins and funding costs.

On wealth issues, again the Reserve Bank has presented its own research and then compared them with the comprehensive HILDA survey of households. The Reserve Bank confirms that wealth in Australia is more unevenly distributed than income, as it is in many industrialised nations. The good news over the past four years is that “wealth grew faster for households with lower wealth than for households with higher wealth.”

The best way to appreciate the RBA Bulletin articles is to read them:

http://www.rba.gov.au/publications/bulletin/2012/mar/index.html

The implication is that public debate on many issues has been poorly based, and the latest research re-establishes the facts. Consumers and businesses are quite uncertain in the current environment. Anything that can serve due to reduce the uncertainty has to be beneficial for the economy.

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