Market Monetarism at the G20

A proposal for the monetary authorities to adopt a target of nominal GDP, aired by Bank of England Governor-designate Mark Carney in December, was discussed on the sidelines of the G-20 meetings, said Russia’s G-20 sherpa, Ksenia Yudaeva. Russia holds the group’s rotating presidency this year.


Also, the failure of price level targeting:

Russia, the largest emerging economy to increase interest rates last year, is planning to shift to inflation targeting by 2015. The country’s central bank was forced to abandon its target range of 5 percent to 6 percent for consumer price growth last year after a surge in global food prices.

It is well known that supply shocks are the Achilles’ Heel of price level targeting. Russia needs to skip the transition interim period of inflation targeting and go straight for NGDPLT.


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