Nick Rowe and Bill Woolsey have chimed in with some new thoughtful pieces on nominal GDP targeting. Nick Rowe explains how expectations management is key to nominal GDP level targeting, while Bill Woolsey responds to the nominal GDP targeting comments of Paul Krugman, Brad DeLong, and Stephen Williamson.
Yeah, sure, expectations. Yes, the Fed must be transparent, and it must say it will buy bonds until the economy reaches its NGDP goals.
ReplyDeleteThat said, fire-hosing hundreds of billions on dollars into the economy--real money--will have a positive impact too.
I am not defending the fiscalists--but I am suggesting aggressive use of any means necessary to get money into the economy.