Speaking as an Australian, you might want to consider why Australian macroeconomic policy was so stable until the pandemic. The market monetarist analysis gives the best basis for understanding this.
The case for targeting NGDP rather than inflation is very persuasive! I am less completely persuaded that monetary policy is always sufficient to achieve macroeconomic stability. In the current situation in the U.S., though, where NGDP is soaring along with inflation, there's no real difference: NGDP targeting and inflation targeting would both be tightening sharply. Maybe a NGDP targeter would be raising rates faster? If that's the argument -- that the reason we have both high inflation and NGDP way above trend is that we haven't crushed real growth hard enough with severe rate hikes -- then fair enough.
Meanwhile, with respect to Australia specifically, two things of note.
First, historically they're economically dominated by resource-extraction, which results in a very different sensitivity to commodity prices from a typical developed economy. Makes sense that their central bank would react differently to a drop in their currency than, say, the U.K.'s would given that fact.
Second, and I have long wondered how much this matters, Australia has been growing demographically at a higher level and in a much more consistent way than most other developed economies, largely because of the huge volume of immigration. (Canada is similar.) NGDP is measured directly (one big advantage of targeting it), but in theory it can be decomposed into population growth, productivity growth, and inflation. Given that fact, I would think engineering a stable positive trend in NGDP would be considerably easier with a demographic tail wind than if the wind is blowing in the other direction, as in most of Europe.
The problem with that response is that, prior to 1993, Australia tended to be persistently less macro-economically stable than other developed democracies. We did not change being a resource-exporting, labour and capital-importing country before and after 1993. What changed was the monetary regime.
Speaking as an Australian, you might want to consider why Australian macroeconomic policy was so stable until the pandemic. The market monetarist analysis gives the best basis for understanding this.
https://www.econlib.org/lucky-to-stabilize-ngdp-not-inflation/
The case for targeting NGDP rather than inflation is very persuasive! I am less completely persuaded that monetary policy is always sufficient to achieve macroeconomic stability. In the current situation in the U.S., though, where NGDP is soaring along with inflation, there's no real difference: NGDP targeting and inflation targeting would both be tightening sharply. Maybe a NGDP targeter would be raising rates faster? If that's the argument -- that the reason we have both high inflation and NGDP way above trend is that we haven't crushed real growth hard enough with severe rate hikes -- then fair enough.
Meanwhile, with respect to Australia specifically, two things of note.
First, historically they're economically dominated by resource-extraction, which results in a very different sensitivity to commodity prices from a typical developed economy. Makes sense that their central bank would react differently to a drop in their currency than, say, the U.K.'s would given that fact.
Second, and I have long wondered how much this matters, Australia has been growing demographically at a higher level and in a much more consistent way than most other developed economies, largely because of the huge volume of immigration. (Canada is similar.) NGDP is measured directly (one big advantage of targeting it), but in theory it can be decomposed into population growth, productivity growth, and inflation. Given that fact, I would think engineering a stable positive trend in NGDP would be considerably easier with a demographic tail wind than if the wind is blowing in the other direction, as in most of Europe.
The problem with that response is that, prior to 1993, Australia tended to be persistently less macro-economically stable than other developed democracies. We did not change being a resource-exporting, labour and capital-importing country before and after 1993. What changed was the monetary regime.