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Nominal GDP Targeting

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Nominal GDP Targeting. Common View. Money Supply . Encourages Spending . Money Demand . Discourages Spending . Nominal GDP. = Total Current Dollar Spending = Money Supply × Money Use = M × V = P x Y. How it Works. Total Dollar Spending. NGDP level target. - PowerPoint PPT Presentation

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Page 1: Nominal GDP Targeting

Nominal GDP

Targeting

Page 2: Nominal GDP Targeting

Common View

Page 3: Nominal GDP Targeting

Money Supply

Money Demand

Encourages

Spending

Discourages

Spending

Page 4: Nominal GDP Targeting

Nominal GDP=

Total Current Dollar Spending

=Money Supply × Money Use

= M × V = P x Y

Page 5: Nominal GDP Targeting

NGDP level target

Time

Tota

l D

olla

r Sp

endi

ng

HOW IT WORKS

Page 6: Nominal GDP Targeting

NGDP level target

Time

Tota

l Dol

lar

Spen

ding

HOW IT WORKS

Page 7: Nominal GDP Targeting

WHAT ACTUALLY HAPPENED

Page 8: Nominal GDP Targeting

WHAT ACTUALLY HAPPENED

Page 9: Nominal GDP Targeting

WHAT ACTUALLY HAPPENED

Page 10: Nominal GDP Targeting

EXPECTATIONS MATTER

Page 11: Nominal GDP Targeting

EXPECTATIONS MATTERAverage Expected Inflation Over Next Five Years

Source: FRED Databse

Page 12: Nominal GDP Targeting

THE REST OF THE STORY

Source: FRED Database

Page 13: Nominal GDP Targeting

THE REST OF THE STORY

Source: FRED Database

Page 14: Nominal GDP Targeting

HELPING SAVERS

Source: Philadelphia Fed Survey of Professional Forecasters, FRED Databse

Page 15: Nominal GDP Targeting

HELPING SAVERS

Source: SIFMA

Page 16: Nominal GDP Targeting

HELPING SAVERS

Source: SIFMA


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