Tag Archive | NGDP target

NGDP Targeting >> Inflation Targeting

Marcus Nunes wrote this excellent analysis of why NGDP Targeting works better than the well-established Inflation Targeting. To put it in layman’s terms, inflation targeting over-stimulates booms and does not react strong enough to downturns. This is because it focuses only on price inflation, not on output growth. The Federal Reserve has a so-called “dual […]

Clarifying NGDP Targeting

I would like to clarify for all non-economists out there what NGDP Targeting is really about. This article from ZeroHedge claims that NGDP Targeting is synonymous with issuing new debt and inflating old debt away. In fact, issuing debt has nothing to do with it. NGDP Targeting would establish a reliable rate of nominal economic […]

NGDP targeting FTW!

So, support for NGDP targeting finally seems to grow. It wouldn’t solve the basic problem that we (the Western world) suffer from too much regulation, a stricken financial system, and too much debt. So I wouldn’t bet on NGDP targeting increasing long-term growth or lowering long-term unemployment rates much. But it could surely help us […]