Facts, Fears, and Functionality of Nominal GDP Level Targeting: A Guide to a Popular Monetary Policy Framework
Posted: 13 Jun 2019
Date Written: May 22, 2019
Nominal GDP level targeting (NGDPLT) has become an increasingly popular monetary policy framework over the past decade. This rising popularity has led to increased interest in, as well as some confusion over, how this framework actually works. This paper responds to this interest by summarizing the basic facts of NGDPLT and by addressing some of the fears surrounding it. The paper also demonstrates how a NGDPLT might work in practice.
Keywords: Nominal GDP Targeting, Nominal Income Targeting, Monetary Policy Framework, Target
JEL Classification: E40, E42
Suggested Citation: Suggested Citation