Category Archives: Monetary Theory

Hayek endorsed anti-deflationary, publicly announced NGDP targeting in 1975

Friedrich Hayek endorsed the core of ‘NGDP targeting’ 3 years before the idea was ‘first proposed‘ by James Meade in 1978: “If I were responsible for the monetary policy of a country I would certainly try to prevent a threatening … Continue reading

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Stephen Williamson’s “New Monetarism” = F. A. Hayek’s Monetary Economics in a New Bottle with a New Label

Let’s compare Stephen Williamson’s account of “New Monetarism” with Hayek’s account of the expansion and contraction of the supply of various types of monies, near monies, shadow monies, and money-substitute assets of changing liquidity. Here’s Williamson: A New Monetarist thinks … Continue reading

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ARTICLE: Scott Sumner Makes the Case for NGDP Targeting

In a paper written for the Adam Smith Institute (pdf). Quotable: George Selgin pointed out that NGDP targeting would produce lower than normal inflation during a productivity boom. One of the criticisms of inflation targeting is that because central banks … Continue reading

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IT’S BACK TO HAYEK ALL OVER AGAIN

Olivier Blanchard: Monetary policy has to go beyond inflation stability, adding output and financial stability to the list of targets, and adding macro-prudential measures to the list of instruments. Of course, Hayek established the fundamental significance of this point in … Continue reading

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WILL THE REAL “AUSTRIAN” PLEASE STAND UP

Or, PAUL KRUGMAN DISSEMBLES AGAIN. David Beckworth and Scott Sumner — citing Hayek, Selgin, Horwitz, and White — claim the mantle of Friedrich Hayek in making their case for NGDP targeting, quantitative easing, and a monetary disequilibrium understanding of the … Continue reading

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HAYEK QUOTE OF THE DAY

“Stable monetary conditions require that the stream of money expenditure is the fixed datum to which prices and wages have to adapt themselves, and not the other way around.” — F. A. Hayek

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