Comments on Stephen Koukoulas “Why rates have no further to fall”, 22/01/2013, http://www.businessspectator.com.au/bs.nsf/Article/RBA-Reserve-Bank-interest-rates-AUD-Australian-dol-pd20130122-46QQR?OpenDocument&src=sph&src=rot
While domestic economic condition and inflation is one thing, the international conditions are another totally different beast.
The recent few years in the wake of GFC indicates that the conventional wisdom or policy prescription is no longer the best approach, not just for the big players but also for Australia.
There is no ending to the quantitative easing policies in the US, EU or Japan as the last just embarked on this path under its new government.
In such an international environment, your analysis appears completely out of kilt with what the best policy really should be based on real world cases as opposed to the inapplicable conventional thinking at the moment.
One should never be mechanical in thinking and must know the limit of a particular line of thinking and adopt the best even it may mean you have to break with the tradition.
In this occasion, unfortunately, you seem to have fallen into the trap that most economists do in most of the time.
What would be the best policy for Australia? It should be the one to stay comparatively the same as those big players, do similar things (though not necessarily in the same manner) to keep Australia international competitive or to at least neutralise the international effects.