Despite the Federal Reserve's use of QE programs, the U.S. economy experienced one of the weakest recoveries on record following the Great Recession. Not only was real growth disappointingly low, but even nominal growth over which monetary policy has more control was feeble. Why did QE fail to...

A series of papers have shown that a monetary regime targeting nominal GDP (NGDP) can reproduce the distribution of risk that would exist if there were widespread use of state-contingent debt securities (Koenig, 2013; Sheedy, 2014; Azariadis et al., 2016, Bullard and DiCecia, 2018). This paper...

Some economists have advocated 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...

Monetary policy is hard. In the best of times, it requires a well-informed understanding of the economy and the ability to respond in a timely manner. In less favorable conditions, monetary policy requires near omniscience and the herculean power to stop economic disasters from unfolding.This...

A low-inflation mystery emerged during the 2010-2019 period as the Federal Reserve struggled to hit its two percent inflation target. This paper presents theoretical results and empirical evidence that points to the safe asset shortage as a key reason for the low inflation during this time....