In accord with my former critic Keating's warning

I eventually wrote to Keating pointing out that he was wrong about my advice and I was owed an apology. In short order, the treasurer embarked on a charm offensive. In a long telephone conversation, he first explained how he had been misled about my position in 1987-88, and promising eventually to put the record straight - not something I have noticed him doing, incidentally. He then made a vociferous complaint about the "wimps" at the RBA who had refused to lift interest rates by the full 2 percentage points he had demanded. I agreed with him about the RBA's alleged mindset, but being in receipt of such a (totally deniable) gobbet of information was of course of little use to me. I pass it on now as a contribution to Australia's economic history and to support Keating's claims as reported by Cleary last week.

Cleary also quoted Bernie Fraser as saying: "There were a lot of inflation hawks around." I was certainly one of those, and I am certain that the article I have quoted was a useful input to the decision to finally kill inflation in Australia. I also know for certain that it had an impact on the Howard government's decision to create an independent central bank with a mandate to control inflation, a proposal not immediately endorsed by Fraser's Reserve Bank.

Indeed, I have been told by a retired secretary of the treasury that the suggestion (from an international agency) for an independent and inflation-fighting RBA was initially greeted with a derisive snort.

Of course, all such debates move on. I have argued in my Henry Thornton column in this newspaper that the RBA has consistently raised interest rates too little, too late. And that the RBA should concern itself with a broader definition of inflation, including asset inflation.

And in thinking about monetary policy at the global level, I have become doubtful that multi-country "Taylor rules" for setting interest rates are now appropriate, especially when the US has a tendency to set rates virtually at zero at times of economic stress.

My forthcoming book on "Great Crises of Capitalism" discusses these matters in some detail.