2011 ends on a high note for “Market Monetarism” and “NGDP Targeting”. The last quarter of the year has been especially exiting. NGDP (level) Targeting was “endorsed” by Krugman, Christina Romer and Goldman Sachs, among other “luminaries”. During the period several important media like the Economist and The Washington Post wrote up on the topic. At the very end of the year Ezra Klein gave out a “wonk award” to Scott Sumner for his blogging on NGDPT and the Economist had a long piece where Market Monetarism figures prominently.
I was fortunate and honored to host a guest post by Lars Christensen back in September in which the name “Market Monetarism” was introduced (and stuck). In part based on the success of that post Lars decided to become a blogger, with more of a focus on Europe.
I would like to mention three of my commenter’s: Benjamin Cole for his wide participation in the realm of blogs and unwavering tenacity. Catherine Johnson, far removed from economics, is extremely interested and has linked to MM in her blog, and Rafael, the only Brazilian regular of my blog (which he found through Scott Sumner) who has written and published the first MM (Regras de política monetária em um ambiente recessivo) paper in Portuguese.
I must also mention David Levey, a former managing director, sovereign ratings, from Moody´s who never misses e-mailing interesting material dealing with MM or NGDPT, and Doug Irwin who is square in the camp of MM and has written great papers. I single out his recent paper on Gustav Cassel, arguably a forerunner of MM.
To all, an enjoyable and productive 2012.
Update: Importantly, I forgot to mention that Market Monetarism got an Wikipedia entry:
The market monetarism school of macroeconomics advocates that central banks target the level of nominal income instead of inflation, unemployment or other measures of economic activity, including in times of shocks such as the bursting of the real estate bubble in 2006. In contrast to traditional monetarists, market monetarists do not believe monetary aggregates or commodity prices such as gold are the optimal guide to intervention. Market monetarists also reject the New Keynesian focus on interest rates as the primary instrument of monetary policy. Market monetarists prefer a nominal income target due to their twin beliefs that rational expectations are crucial to policy, and that markets react instantly to changes in their expectatations about future policy, without the “long and variable lags” highlighted by Milton Friedman