Attention Economy


Thursday, September 13, 2012

Has the Fed Implicitly Adopted NGDP Targeting?



The Fed statement appears to indicate indirect NGDP (nominal GDP) targeting. By giving an open-ended commitment to undertake monthly asset purchases until the labor market improves, the Fed is essentially aiming for a higher level of output and is not too worried about medium-term inflation risk.
Here is a nice intro to NGDP targeting for novices -
http://www.economist.com/node/21526886

Sept 13 FOMC Meeting

Bloomberg Report