,
8 tweets,
3 min read
Read on Twitter
As you know, the Federal Reserve is conducting its big review of monetary policy this year. This includes examining alternative monetary policy frameworks. The Fed seems to be zeroing in on average inflation targeting, but there are options including NGDP level targeting. (1/x)
As part of this conversation, I have a new policy brief out on NGDPLT that is written for a broad audience. mercatus.org/system/files/b… (2/x) 
In this policy brief, I first lay out seven key facts about NGDPLT. (3/x)
I then respond to seven common fears about NGDPLT. (4/x)
After dealing with these facts and fears of NGDPLT, I show how one could implement NGDPLT in practice. There are other ways to do it, this is just one illustrative example. (5/x)
For good measure, I throw in a toy macro model in the appendix for those so inclined. It helps illustrate the challenge of supply shocks for policy makers. (6/x)
Finally, based on Google hits, NGDPLT appears to be a relatively popular approach to monetary policy. (Sorry fans of price level targeting and a higher inflation target.) This is something to consider given that any new framework is going to need public support. (7/x)
So please check out the policy brief and share it around. Thanks. mercatus.org/publications/m… (end)
