So we don’t like NGDPLT anymore? Sounds like the preferred policy is “NDGPLT - but we change the level if it turns out we missed our target, but only if we missed to the upside”. Gonna need a longer acronym.
Unexpected inflation (or deflation) is zero-sum but it creates unanticipated winners and losers. By allowing a permanent deviation from the targeted level you simply make these gains & losses permanent. This strikes me as highly politically destabilizing over time. (For example, many of the 35% who don’t own homes in the US are likely permanently priced out now if we follow your policy).
So we don’t like NGDPLT anymore? Sounds like the preferred policy is “NDGPLT - but we change the level if it turns out we missed our target, but only if we missed to the upside”. Gonna need a longer acronym.
Unexpected inflation (or deflation) is zero-sum but it creates unanticipated winners and losers. By allowing a permanent deviation from the targeted level you simply make these gains & losses permanent. This strikes me as highly politically destabilizing over time. (For example, many of the 35% who don’t own homes in the US are likely permanently priced out now if we follow your policy).