I’m increasingly hearing people call for an NGDP target. I’m not really convinced it is superior to inflation/price level targeting to be honest. Let me discuss below.
Category Archive: Inflation debate
Permanent link to this article: http://www.tvhe.co.nz/2011/11/17/a-point-on-ngdp-targeting-and-inflation-expectations/
Oct
21
2011
Expectations and commitment are monetary policy
I know we hear a lot about what “monetary policy is” in New Zealand. According to our media monetary policy can make our incomes the same as those in Australia, make the price of everything move in our favour, build us new houses, reduce our reliance on foreign everything, increase and decrease house prices, and …
Permanent link to this article: http://www.tvhe.co.nz/2011/10/21/expectations-and-commitment-are-monetary-policy/
Mar
04
2011
The Fed and policy: Temporary but not permanent
Via Arnold Kling at Econlog we see this paper regarding the impact on Fed policy. It is an interesting paper in an economic history sense, I would suggest reading it. However, the passage I want to focus on is the same one Arnold mentioned: First, spending and pricing decisions are assumed to be based on …
Permanent link to this article: http://www.tvhe.co.nz/2011/03/04/the-fed-and-policy-temporary-but-not-permanent/
Nov
24
2009
The carry trade and mortgage rates: Shifts and movements
Anyone who has done first year economics will know about shifts and movements. When I tutored the course I would make funny hand gestures trying to illustrate it, hand gestures that were mildly less weird then when I talk about price floors and ceilings. Still, there has been a lot of banging on about the …
Permanent link to this article: http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/
Nov
19
2009
Discussing inflation targeting and our exchange rate concerns
In a recent speech (ht Rates Blog) Goff committed to destroying monetary policy independence and damaging the New Zealand economy if he gets into power. That is all well and good. However, I think part of the reason this issue has occurred is because of a lack of understand around the necessity of monetary policy …
Permanent link to this article: http://www.tvhe.co.nz/2009/11/19/discussing-inflation-targeting-and-our-exchange-rate-concerns/
May
12
2009
Why we have to be careful equating CPI growth to inflation
We have previously mentioned how important it is to interpret CPI growth carefully. Inflation is the trend rate of growth in the “general price level”, and as a result there are other factors that get caught up in our attempts to measure inflation. James Hamilton at Econbrowser pointed to a paper by Reis and Watson …
Permanent link to this article: http://www.tvhe.co.nz/2009/05/12/why-we-have-to-be-careful-equating-cpi-growth-to-inflation/
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