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Hmm there are good points and bad points. If wage growth becomes detached from productivity, producers will shed labour for capital - unemployment etc etc. Whether this happens in reality to a meaningful extwnt I'm not sure. Also, cost-push inflation would have crippled Australia's exporters and our CAD would be more outrageous than it already is. Overall its a balance ... and one the legislative structure has decided upon. As for the housing boom that's separate to AS/AD analysis IMO, rather a change in the economy's composition.