As the thread heading states,stalling of infrastructure projects either mining or others,sackings en mass(QLD),and last but not least lowering the interest rates.At the end of the day it is about basically diluting the debt bomb.I am assuming we are discussing the Australian economy in this context and not the world.
Quoting an Abstract from Oxford Economic papers
The standard Blanchard-Quah (BQ) decomposition forces aggregate demand and supply shocks to be orthogonal. However, this assumption is problematic for a nation with an inflation target. The very notion of inflation targeting means that monetary policy reacts to changes in aggregate supply. This paper employs a modification of the BQ procedure that allows for correlated shifts in aggregate supply and demand. It is found that shocks to Australian aggregate demand and supply are highly correlated. The estimated shifts in the aggregate demand and supply curves are then used to measure the effects of inflation targeting on the Australian inflation rate and level of GDP.
