Something interesting is happening in the United Kingdom. Some government officials there are pushing for the Bank of England to adopt a NGDP target. From the Independent:
Officials in the UK Treasury are “probably” considering whether to change the Bank of England’s inflation-targeting mandate due to the massive economic shock imparted by the coronavirus crisis, according to a former minister.
Lord Jim O’Neill, who was commercial secretary to the Treasury in 2015, wants the central bank to shift from its current target of keeping inflation at 2 per cent to targeting a steadily rising trend of nominal UK GDP growth instead.
Since the U.K. Treasury determines the monetary policy target for the Bank of England, these rumblings are more than noise. The U.K. Treasury’s increased interestRead More »