Spending has also to be “lifted”

The Fed did QE2 and it got inflation and inflation expectations up. But it did virtually nothing to aggregate nominal spending (see pictures). As a result it became a “lightening rod for criticism” (in the words of David Beckworth), like this manifestation from Raghuram Rajan.
In order to get monetary stimulus really going and effective the Fed needs urgently to establish a nominal level target…and shoot for it!

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