A familiar old saw about the conduct of monetary policy is that it's like trying to drive a car while looking only in the rearview mirror. The idea is that policymakers are trying to steer a course that will keep the economy close to full employment with low, stable inflation, while their only...

Remarks before the Morris County Chamber of Commerce, Florham Park, New Jersey.

Remarks before the Morris County Chamber of Commerce, Florham Park, New Jersey.

Global food prices are soaring. Since February 2009, the United Nations Food and Agriculture Organization world food price index has risen roughly 67 percent, surpassing the previous peak in June 2008 (Chart 1). The last food price surge, from early 2007 to mid-2008, prompted riots in many...

Keynesian monetary and fiscal policies have served as the fundamental government reaction to economic hardship since the development of Keynesian economic theory. With Keynesian policies having a major impact on economic outcomes, the success and effectiveness of these policies must be...

Economic research has considered Private Debt a determinant of GDP growth for years. By keeping this perspective, the objective of this work is to understand how much of the GDP response to a monetary shock is due to the variation of private debt. This is the marginal contribution of private...

Some economists advocate nominal GDP targeting as an alternative to the Taylor rule. These arguments are largely based on the idea that nominal GDP targeting would require less knowledge on the part of policymakers than a traditional Taylor rule. In particular, a nominal GDP targeting rule would...

We use a simple model to illustrate that nominal GDP targeting might produce a suboptimal equilibrium if there is a growth-maximizing rate of inflation. Following a shock, we find that targeting nominal GDP might result in lower real GDP growth than the economy could sustainably produce given...

Nominal GDP (NGDP) targeting has received a lot of attention over the past decade. This note provides a brief review of the key arguments for NGDP targeting and then presents some practical ways to use it in the conduct of U.S. monetary policy. Specifically, this note shows how to construct...