So many sharp economists in my TL want the Fed to target NGD. Forgot their own training? It’s *real* GDP that matters to ppls’ outcomes. Surely FED should dispense w/confusing ‘nominal’ side-trip & target RGDP directly. Namely, choose policies to make RGDP go up YoY. Done.
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Replying to @soncharm
targeting ngdp is kind of how thats done long term in this case
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Replying to @eigenrobot
no! that’s stupid it could just make the price level go up while RGDP plummets. this direct consequence of the math surprised so few ppl get this
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Replying to @eigenrobot
I’ll walk u thru it say you wanna keep X times Y at a target. ok sound good right? but what if X go up while Y go down at the same time. OOP’S now who’s the dummy maybe I need a chalkboard
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Replying to @eigenrobot
but why u want RGDP (maybe) go down. why u hate America
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