You often state that perhaps nominal wage compensation targeting would be superior to NGDP targeting.
But as far as I can tell, the two targets are justifiable on very different grounds:
Nominal wage targeting is preferable if wages are the stickiest price.
NGDP targeting is preferable if sticky debt prices ('non-state contingent nominal contracts' a la Koenig/Sheedy/Bullard) are most important; or is preferable on Yeager/Selgin monetary disequilibrium grounds.
But the two are quite different animals, are they not? I don't think we should casually conflate the two as being all that similar, when the two proposed policies have quite different justifications.
bhalperin7 karma
You often state that perhaps nominal wage compensation targeting would be superior to NGDP targeting.
But as far as I can tell, the two targets are justifiable on very different grounds:
Nominal wage targeting is preferable if wages are the stickiest price.
NGDP targeting is preferable if sticky debt prices ('non-state contingent nominal contracts' a la Koenig/Sheedy/Bullard) are most important; or is preferable on Yeager/Selgin monetary disequilibrium grounds.
But the two are quite different animals, are they not? I don't think we should casually conflate the two as being all that similar, when the two proposed policies have quite different justifications.
Thanks!
View HistoryShare Link