Targeting Nominal GDP growth by monetary policymakers is equivalent to a restriction on policymaker preferences for an optimality condition derived under rational expectations. This paper reports the results of simulations of a calibrated model comparing Nominal GDP growth targeting with the...

This paper examines a class of interest rate rules that respond to public expectations and to lagged variables. Varying levels of commitment correspond to varying degrees of response to lagged output and targeting of the price level. If the response rises (unintentionally) above the optimal...