A "Working" Solution to the Question of Nominal GDP Targeting

Michael Belongia and Peter Ireland

No 802, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Although a number of economists have tried to revive the idea of nominal GDP targeting since the financial market collapse of 2008, relatively little has been offered in terms of a specific framework for how this objective might be achieved in practice. In this paper we adopt a strategy outlined by Holbrook Working (1923) and employed, with only minor modifications, by Hallman, et al. (1991) in the P-Star model. We then present a series of theoretical and empirical results to show that Divisia monetary aggregates can be controlled by the Federal Reserve and that the trend velocities of these aggregates, by virtue of the properties of superlative indexes, exhibit the stability required to make long-run targeting feasible.

Keywords: nominal GDP targeting; Holbrook Working; P-Star (search for similar items in EconPapers)
JEL-codes: E51 E52 E58 (search for similar items in EconPapers)
Date: 2012-06-30, Revised 2013-01-04
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (6)

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Journal Article: A “WORKING” SOLUTION TO THE QUESTION OF NOMINAL GDP TARGETING (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:802

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