My personal income is lower now than it was 20 years ago - in nominal as well as real terms. But I’m happier in my work and life now than I was then. Which poses the question: why do the main political parties regard the threat of stagnation with such fear?
David Beckworth submits: I am late getting to this, but Mark Thoma wants to hear the case for nominal GDP targeting. This approach to monetary policy requires the Fed to stabilize the growth path for total current dollar spending. As an advocate of nominal GDP level targeting, I am more than happy to respond to Mark's request.
By Calafia Beach Pundit:
(click to enlarge)
Today's revision to third quarter GDP was meaningful, since it boosted both real growth and inflation by meaningful increments. As a result, nominal GDP growth (annualized) for the quarter was 5.6%, up from the previously reported 4.7%. As the chart above shows, nominal GDP growth in the third quarter now looks to be among the strongest in the current business cycle expansion.