In the case of supply shocks, where the monetary response to achieve the real and nominal objectives is likely to be in conflict in the short term, the medium-term horizon of the inflation target in Australia allows for a greater weight to be placed on output stabilisation and a more gradual return of the inflation rate to target, than with a strict inflation target.
Again, the practice of most central banks over the past two decades has tended to evolve towards the sort of flexibility explicitly recognised in the Australian target, notwithstanding the lexicographic ranking of inflation and output objectives in the specification of some other inflation targets.4 The Statement has not undergone much change since 1996.