Samuel Brittan writes in the Financial Times:
Too much that passes for financial comment is preoccupied with the bogey of deflation when it ought to be concerned with the reality of slump.If I read Brittan correctly, he is saying we should focus on the source of the problem--the slump--not the symptom of it. Sounds like Brittan would be sympathetic to a nominal income target for monetary policy. Brittan also makes this interesting comment:
Some of the same short-fused commentators who now blame Alan Greenspan, the former Federal Reserve chairman, for overstimulating the US economy [in the early-to-mid 2000s] were then screaming for him to do more to offset the threat of deflation.Brittan goes on to talk more about deflation, including the mention of an article I really enjoyed reading.
You may be interested to know that in the 1980s, at the time of UK's monetarist experiment under Thatcher, Samuel Brittan was a strong advocate of nominal GDP targeting.
ReplyDeleteVery interesting! Thanks ECB for the insight.
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