Yep, dampening demand is done if discretionary spending is going down. By definition, essential spending is inelastic.
A big part of the problem is that supply side inflation is helped by oligopolistic markets. So many markets in Australia have so few sellers that they have way too much power over prices. How you address that is anybody's guess because markets tend towards oligopoly. Interest rate are little help unless you are willing to accept essential expenditure going down which means people can't afford housing, can't afford heating etc.
This is where we should be questioning the economic system. The economic system only exists to serve the people, if people suffer because of the policies "needed" to correct the economy, then the economy needs to change.
DS
A big part of the problem is that supply side inflation is helped by oligopolistic markets. So many markets in Australia have so few sellers that they have way too much power over prices. How you address that is anybody's guess because markets tend towards oligopoly. Interest rate are little help unless you are willing to accept essential expenditure going down which means people can't afford housing, can't afford heating etc.
This is where we should be questioning the economic system. The economic system only exists to serve the people, if people suffer because of the policies "needed" to correct the economy, then the economy needs to change.
DS