It is hard to believe, but it has been almost four years since William Luther turned nominal GDP targeting into a fashion statement. Below is my attempt to further his effort. I plan to wear this shirt around my neck of the woods. I will report back how my Tennessee and Kentucky neighbors respond to it. The back of the shirt is my trump card if they start calling me a socialist.
P.S. Yes, you too can order the shirt here.
David, I'm not worried you'll be mistaken for a socialist... I'm worried you'll be mistaken for a target!!... and I don't think that fine print gobbly gook from Hayek or Friedman will make a difference in that regard.... plus it's on the wrong side of the shirt!... somebody looking at you through their rifle scope won't see that. :D
ReplyDeleteNice read! Very informative. Investing in the World's Hottest Emerging Market. Read it here: http://bit.ly/1kqJTpT.
ReplyDeleteWow. I did not know F&H (and NGDPers) were so explicit about velocity and money creation. Or maybe I did subconsciously.
ReplyDeleteI've been tying this thought together in my mind with observations on the technological path towards state/official eMoney, and in particular its impact on deposit accounts, payment systems and transaction costs. Not an original thought, but the end of banking as we know it today (where private loans create money) seems not implausible. Instead complete disaggregation of credit checkers, p2p lenders, eWallet app makers, etc. etc.
A couple of handy things about eMoney are that you can see in the public blockchain an anonymous real-time snapshot of money turnover (velocity) and you can do electronic helicopter drops. So you could have an algorithm that trickles out a tiny amount of new money every night to all state eWallets, with the flow rate increasing if velocity falls, and decreasing if it rises.
This gets you:
- the expectation-setting benefit of NGDP targeting (built in to the algorithm) plus credibility
- the inflation capping benefits of gold (all money-creation is controlled)
- the deflation managing benefits of fiat (all money-creation is tied to velocity declines)
It doesn't save you from:
- stagflation
- housing/asset bubbles
But we all know they're fiscal/regulatory problems anyway...
More here
http://technooptimist.tumblr.com/post/82331669085/automating-money-creation
I have been a target for abuse my whole life...the shirt fits.
ReplyDelete