Earlier this week I attended the Southern Economic Association annual meetings in San Antonio, Texas. Among other things, I was part of a session at the meetings whose participants all happen to agree the Fed let the ball drop in late 2008, early 2009 by effectively--though not intentionally--letting monetary policy tighten: George Selgin, Scott Sumner, Josh Hendrickson, and of course myself. (See here and here for evidence of this tightening.) Our session went well (Larry H. White agrees) and we were able to chat some more over meals along the riverwalk. The conversations were great and covered everything from blogging to nominal income targeting to fiscal policy. I left the meetings more convinced than ever that a nominal income target would have done a lot to prevent the crisis--in terms of minimizing the buildup of economic imbalances during the 2003-2005 nominal spending boom as well as the late 2008, early 2009 nominal spending collapse--and is the best way forward for U.S. monetary policy given the current institutional arrangements in the United States. I want to thank Josh Hendrickson for organizing the session.
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