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Related: About this forumFed now targeting nominal GDP
The announcement today was significant in that the Fed stated no particular size or duration of the operation. They basically said it would continue indefinitely until the economy improves. So the Fed seems to be targeting GDP and if so, this would be a first.
But heres the thing: this has to work. Its what everyone has been screaming for, for a long time. It will be a test as to whether or not the Fed really can target GDP or target anything other than an interest rate for that matter. I can say I am an expert at starting fires, but I cannot guarantee that if I start a fire everything in the neighborhood will burn down. I can only guarantee that I can start a fire.
If it doesnt workwhich I believe it cantthen confidence in the Feds ability to target GDP will be shattered. In the long-term that could actually be a good thing, because it will hopefully get us back to where these problems are really dealt withfiscal policyand get us off the false notion that the Fed has cures.
Read more: http://mikenormaneconomics.blogspot.com/2012/09/fed-now-targeting-nominal-gdp.html
But heres the thing: this has to work. Its what everyone has been screaming for, for a long time. It will be a test as to whether or not the Fed really can target GDP or target anything other than an interest rate for that matter. I can say I am an expert at starting fires, but I cannot guarantee that if I start a fire everything in the neighborhood will burn down. I can only guarantee that I can start a fire.
If it doesnt workwhich I believe it cantthen confidence in the Feds ability to target GDP will be shattered. In the long-term that could actually be a good thing, because it will hopefully get us back to where these problems are really dealt withfiscal policyand get us off the false notion that the Fed has cures.
Read more: http://mikenormaneconomics.blogspot.com/2012/09/fed-now-targeting-nominal-gdp.html
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Fed now targeting nominal GDP (Original Post)
girl gone mad
Sep 2012
OP
tama
(9,137 posts)1. LOL
Hasn't Fed and Treasury been "targeting" (manipulating) GDP for ages?
And as if that idiotic GDP measure had any value to begin with. Awww, economists, blather blather blather much over nothing...
Demeter
(85,373 posts)2. Fed Shooting Randomly at Anything that Holds Still
with eyes wide shut. It's beyond a farce.
jtuck004
(15,882 posts)3. I wonder how many more nominal people will fall into poverty or become working poor while
these people screw around trying to support the assets of the "Friends of Rmoney.
mother earth
(6,002 posts)4. Wow, what a game. Meanwhile, Congress enjoys their cushy jobs
sitting on their collective asses.