ExposAsia No 02/2012, One Size Fits All, shows how two sectors of the Australian economy - residential housing and commodity extraction - have come to dominate economic activity and, in particular, capital spending. We conclude that both sectors are driven by outside influences and domestic complacency: inappropriate monetary policies in the rest of the world that have not been sufficiently neutralised in Australia by the authorities (and which have been actively promoted and encouraged by the banking sector) and the great investment boom in China which is itself partly the result of these loose monetary policies globally. Now, more than ever, Australia is beholden to global money flows and global monetary policy.

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