In the 1980s, Australia's Labour Government was reasonably successful at increasing the growth rate of the economy which reduced unemployment and improved living standards. By the end of the decade, however, Australia was running a substantial current account deficit, and partly in response to this, monetary policy was tightened and the economy went into recession at the beginning of the 1990s. What light does Thirlwall's Law cast on Australia's experience in the 1980s? Use the modified version of Thirlwall's Law to suggest how allowing the Australian dollar to depreciate in the face of the current account deficit may have affected the situation. What factors would have made such a depreciation more effective in addressing the current account problem? Do you think a policy of investing in the development of Australian industry across the 1980s would have changed the situation? Use the various versions of Thirlwall's Law to explain your answer.