Higher profile economists like Krugman and Christina Romer have said it’s worth a shot. Woodford too I believe. We’ve had inflation targeting for many years and it hasn’t worked. Why not try something new. If the Central Bank is failing at NGDP path level targetting it’s a lot more obvious than how they’ve been failing at inflation targeting.
Krugman advocated for a higher inflation target as well but now has given up on both apparently viewing them as politically impossible.
- Tony Yates says:
Why not? Because I don’t think it would fix anything that is problematic about inflation targets. It won’t help us escape the zero bound, and NGDP targeting would not have helped avoid the financial crisis. That was caused not by bad monetary policy, but by bad financial regulation policy.
He urgently needs to shed some of the “straight-jackets” under which he´s operating!