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I just realised this is very similar to the unintended consequences of the RBA decision to ban the interchange fee on ATM transactions in March 2009.
It was supposed to lower fees for consumers.
In fact, it has led to a massive decline in the number of bank-owned ATMS.
They are being replaced by ATMs owned by third parties.
Who charge a fee per transaction which is higher than the old interchange fee.
This confirms my complete lack of confidence in economists to understand the real world.
Worse, they don't want to understand the real world.
The rhetoric coming from the RBA is basically saying businesses aren't reacting in the way they should.
This is a real world example of the concept of "irrational actors" which economists use as an excuse when their models don't predict real world events.
It was supposed to lower fees for consumers.
In fact, it has led to a massive decline in the number of bank-owned ATMS.
They are being replaced by ATMs owned by third parties.
Who charge a fee per transaction which is higher than the old interchange fee.
This confirms my complete lack of confidence in economists to understand the real world.
Worse, they don't want to understand the real world.
The rhetoric coming from the RBA is basically saying businesses aren't reacting in the way they should.
This is a real world example of the concept of "irrational actors" which economists use as an excuse when their models don't predict real world events.
