How was the 2% IT chosen. Thought to be low enough not to interfere in people´s decisions.
Now, historically, over the great Moderation, something close to 5% prevailed. Thtat could be a starting point! The level path would be the one we are at now.
I practice, I'd agree, but in principle how _should_ the FAIT or NGDP be chosen.? I'd think that in principle one would chose the income maximizing target.
Why economists are always looking for "unobservables"!? Who the hell knos what´s the "income maximizing target"? Nominal stabilty is observable and attainable. That will minimize both inflation and real output volatilities. With that, maybe the economy will "maximize income"
How is the target rate of NGDP chosen?
How was the 2% IT chosen. Thought to be low enough not to interfere in people´s decisions.
Now, historically, over the great Moderation, something close to 5% prevailed. Thtat could be a starting point! The level path would be the one we are at now.
I practice, I'd agree, but in principle how _should_ the FAIT or NGDP be chosen.? I'd think that in principle one would chose the income maximizing target.
Why economists are always looking for "unobservables"!? Who the hell knos what´s the "income maximizing target"? Nominal stabilty is observable and attainable. That will minimize both inflation and real output volatilities. With that, maybe the economy will "maximize income"