From his 1977 Nobel Lecture:
Earlier I spoke of ‘price stability’ as being one of the components of ‘internal balance’. Yet in the outline which I have just given of a possible distribution of responsibilities no one is directly responsible for price stability. To make price stability itself the objective of demand management would be very dangerous. If there were an upward pressure on prices because the prices of imports had risen or because indirect taxes had been raised, the maintenance of price stability would require an offsetting absolute reduction in domestic money wage costs; and who knows what levels of depression and unemployment it might be necessary consciously to engineer in order to achieve such a result?
Flash forward thirty years to 2007 and the “danger” materializes under Bernanke Chairmanship of the Fed. And this mostly happens because Bernanke was known as an ardent defender of inflation targeting and would likely act accordingly (As most IT central banks did).
Later in the Lecture he proposes NGDP Level Targeting (and even considers the “monetary offset”):
I have told this particular story simply to make the point that the choice between fiscal action and monetary action must often depend upon basic policy issues which should certainly be the responsibility of the government rather than of any independent monetary authority. Perhaps the best compromise is an independent monetary authority charged so to manage the money supply and the market rate of interest as to maintain the growth of total money income on its 5-per-cent-per-annum target path, after taking into account whatever fiscal policies the government may adopt.
It took a long time, but now a Center for research on NGDP targeting has been established!
From Meade´s Bio:
My interest in economics had the following roots. Like many of my generation I considered the heavy unemployment in the UK in the inter-war period as both stupid and wicked. Moreover, I knew the cure for this evi, because I had become a disciple of the monetary crank Major C.H.Douglas, to whose works I had been introduced by a much loved but somewhat eccentric maiden aunt. But my shift to the serious study of economics gradually weakened my belief in Major Douglas´s A+B theorem which was replaced in my thoughts by the expression MV=PT
Maybe Tony Yates, being British and all, would want to reconsider his view of NGDP targeting as “silly”!