Friday, July 6, 2012

Scott Sumner on what macroeconomists have wanted all along...

... They just didn't know it. In this new blog post ( ) Scott Sumner makes the point that NGDP targeting is in fact what economists who focus on maco issues have ALL been advocating for the past half-century, even if they did not realize it. The crux of his argument is based on our friend MV=PY; that the focus of all stabilization-policy debates has been how to stablize PY, which is in fact nominal GDP. And I think he's dead right.

"Now that we've figured out how to tame the business cycle, anyone want to get a drink?"

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