Scott Sumner thinks those of us who favor a monetary policy regime of explicit level targeting of a nominal variable (NGDP, in this case) should do one of two things:
- Figure out a group of terms which concisely spell out that we mean rising or falling NGDP levels, as to disentangle the concept from the everyday use of the concept of “inflation”, in the consumer-price sense.
- Steal the concept of inflation from those who abuse the term.
I mostly favor the latter, as judging by the fact that you can veritably rewrite history if your campaign is successful. However, if we must come up with an alternative name for the concept, I propose using the word celerity to define the concept of the level of NGDP. Thus, if NGDP is falling, you can say that we are experiencing “deceleration”, and if NGDP is rising, you can say “acceleration”. Also, “hyper-deceleration” and “hyper-acceleration” are not foreign concepts. Doubleplusgood that people don’t recognize the word “celerity” on its own, but immediately recognize every other form. Kind of strikes a balance between throwing the word around your “elite banker country club” and everyday people talking about it.
“Todays numbers indicate that celerity is at trough for this recession. However, due to the Fed’s actions over the past year, the TIPS spread indicates that acceleration may be just around the corner.”
Or we could just steal inflation.