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Tuesday, January 22, 2013

NGDP 'Targetry' Skepticism

I guess that should be scepticism:

Monetary targetry: Might Carney make a difference?, by Charles A.E. Goodhart, Melanie Baker, Jonathan Ashworth, Vox EU: The Bank of England’s Governor-elect has argued for a switch to a nominal GDP target. This column points out problems with nominal GDP targets, especially in levels. Among other issues, nominal GDP targeting means that uncertainty surrounding future real growth rates compounds uncertainty on future inflation rates. Thus the switch is likely to raise uncertainty about future inflation and weaken the anchoring of inflation expectations. ...

    Posted by on Tuesday, January 22, 2013 at 06:30 AM in Economics, Monetary Policy | Permalink  Comments (97)

          


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