Taylor fires at NGDP targeting – the Market Monetarists fire back

John Taylor has a comment on NGDP targeting. Let’s just say he is not a fan of NGDP targeting.

Taylor’s comments have provoked the Market Monetarists bloggers to fire back at Taylor. See the comments from:

Scott Sumner
Nick Rowe
Marcus Nunes
Bill Woolsey

I don’t have a lot to add, but I would note that it seems like Taylor wrongly thinks that NGDP targeting is discretionary. I have already commented on that common misperception.

See my comment “NGDP targeting is not a Keynesian business cycle policy”

PS To me actually the worst thing about the Taylor rule is that it has created the very damaging misconception that monetary policy is about controlling interest rates. Interest rates is NOT the price of money – it is the price of credit.

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2 Comments

  1. Benjamin Cole

     /  November 20, 2011

    I found Taylor’s critique to be feeble. If even a Taylor can muster only such weak arguments against Market Monetarism…..

    My guess is that taylor will come on board (perhaps using different terminology) if Romney becomes President.

    Again, I say a peevish fixation with inflation, or interest rates, is only the facade of a monetary policy.

    Like it or not, central bankers also have serious and primary responsibilities to economic growth. I can eat 5 percent inflation and crap thunder, but I can’t eat without a job.

    Reply
  1. Selgin’s Monetary Credo – Please Dr. Taylor read it! « The Market Monetarist

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