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bsfinance
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  • A Walk Down GDP Targeting 0 comments
    Nov 2, 2011 8:40 PM
    I'm going to write this solely by rearranging the question and inserting a few definitions.

    Initial Question: Should the Fed target nominal GDP?

    2) What is the Fed trying to accomplish?  An increase in GDP.
      
    3) What is an increase in GDP?  An increase in GDP allegedly measures an improvement in the standard of living.

    4) What is Standard of Living?  the amount of goods and services available to satisfy consumer wants

    5) What is nominal GDP?  The dollar value of all goods and services in the economy

    Restate 1)  Should the Fed target nominal GDP to increase the standard of living?

    After inserting definitions:

    Should the Fed target the dollar value of goods and services in order to increase the amount of goods and services available to satisfy consumer wants.

    WTF - like increase the amount of paper in the economy will somehow make people better off?!?!  Either they don't know what they're doing or they're not trying to increase the standard of living for Americans.
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