Facts, Fears, and Functionality of NGDP Level Targeting: A Guide to a Popular Framework for Monetary Policy

42 Pages Posted: 4 Oct 2019

See all articles by David Beckworth

David Beckworth

Mercatus Center at George Mason University

Date Written: October 1, 2019

Abstract

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 attempts to address this interest by summarizing basic facts of NGDPLT and addressing some of the fears surrounding it. The paper also demonstrates how NGDPLT might work in practice.

Keywords: nominal GDP targeting, NGDP, nominal income targeting, monetary policy frameworks

JEL Classification: E50, E52, E58

Suggested Citation

Beckworth, David, Facts, Fears, and Functionality of NGDP Level Targeting: A Guide to a Popular Framework for Monetary Policy (October 1, 2019). Mercatus Research Paper. Available at SSRN: https://ssrn.com/abstract=3463427 or http://dx.doi.org/10.2139/ssrn.3463427

David Beckworth (Contact Author)

Mercatus Center at George Mason University ( email )

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