Fellow Market Montarist Bill Woolsey has an interesting proposal. He suggests that the Federal Reserve should adopt a policy of targeting “growth rates of nominal GDP from Reagan’s 1983 and 1984 recovery from the recession of 1982”. Bill can hardly be said to be an inflationist as he is in fact is in favour of a long-term target of 3% yearly NGDP growth in the US (that would likely lead to 0-1% inflation over the longer run), but he nonetheless favours returning US NGDP to the pre-crisis trend through more aggressive easing in a transitory period.
But take a look at Bill’s proposal here.
Marcus Nunes
/ October 4, 2011This post has a nice illustration of the whole process, beginning with the Great Inflation, on to the Volker/reagan “transition” and “landing” on the “Great Moderation”:
http://thefaintofheart.wordpress.com/2011/08/15/%E2%80%9Caugust-15-1971%E2%80%9D/
Lars Christensen
/ October 4, 2011Thanks Marcus…