Lars has written a post that puts Australian monetary policy in a favorable light. I have long thought Australia was the best ‘poster’ for market monetarists, having long ago done a detailed comparison between Australia and New Zealand, a nice ‘laboratory experiment’.
The panel below is a good indication that trying to avoid crashes in nominal spending (NGDP) makes the economy much ‘healthier’!
I think this quote from Tim Duy is perfect:
Funny thing is that what the Fed sees as no tightening is evolving into a global tightening now as central banks rush to raise rates. Consequently, money surges into the global safe asset – US Treasuries. And, interestingly, I think that you can argue that this is much, much more disconcerting than last year’s taper tantrum. This seems to me to be a pretty clear global disinflationary shock. And it isn’t like inflation was on a runaway train to begin with.