DSGE
VIP Member
- Dec 24, 2011
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How do you figure on doing that? By decree, Mr. Stalin?
By having the Fed target 0% inflation rather than 2% inflation.
Are you really under the impression that the Fed targets 2% inflation?
As of recently they announced 2% PCE inflation as their medium term target: FRB: Press Release--Federal Reserve issues FOMC statement of longer-run goals and policy strategy--January 25, 2012
Of course I'd be better if rather than being allowed to choose their own target, as long as it's consistent with "price stability and maximum employment", there was an explicit target in the Federal Reserve Act (like what happens in most other developed countries). Of course rather than an inflation target, an NGDP level target would be superior.