{"id":7004,"date":"2013-03-16T16:18:41","date_gmt":"2013-03-16T20:18:41","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=7004"},"modified":"2013-03-16T16:18:41","modified_gmt":"2013-03-16T20:18:41","slug":"ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/","title":{"rendered":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist"},"content":{"rendered":"<p>Scott Sumner suggests that NGDP targeting is a far more conservative approach than the current inflation targeting practiced by the Fed and many other central banks:<\/p>\n<blockquote style=\"background-color:#ddddff;\">\n<p>Most of the blogging Market Monetarists have their roots in a strong free market tradition and nearly all of us would probably describe ourselves as libertarians or classical liberal economists who believe that economic allocation is best left to market forces. Therefore most of us would also tend to agree with general free market positions regarding for example trade restrictions or minimum wages and generally consider government intervention in the economy as harmful.<\/p>\n<p>I think that NGDP targeting is totally consistent with these general free market positions \u2013 in fact I believe that NGDP targeting is the monetary policy regime which best ensures well-functioning and undistorted free markets.<\/p>\n<\/blockquote>\n<p>And here explains why inflation is not a threat under NGDP targeting:<\/p>\n<blockquote style=\"background-color:#ddddff;\"><p>\n<em>Inflation will be higher under NGDP targeting.<\/em> This is obviously wrong. Over the long-run the central bank can choose whatever inflation rate it wants. If the central bank wants 2% inflation as long-term target then it will choose an NGDP growth path, which is compatible which this. If the long-term growth rate of real GDP is 2% then the central bank should target 4% NGDP growth path. This will ensure 2% inflation in the long run.<\/p><\/blockquote>\n<p>Read more at <a href='http:\/\/marketmonetarist.com\/2012\/07\/19\/the-ngdp-level-targeting-the-true-free-market-alternative-we-try-again\/'>NGDP level targeting \u2013 the true Free Market alternative (we try again) | The Market Monetarist<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Scott Sumner suggests that NGDP targeting is a far more conservative approach than the current inflation targeting practiced by the Fed and many other central banks: Most of the blogging Market Monetarists have their roots in a strong free market tradition and nearly all of us would probably describe ourselves as libertarians or classical liberal &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31],"tags":[1828,2238,2470],"class_list":["post-7004","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","tag-inflation","tag-market-monetarism","tag-ngdp-targeting"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Scott Sumner suggests that NGDP targeting is a far more conservative approach than the current inflation targeting practiced by the Fed and many other central banks: Most of the blogging Market Monetarists have their roots in a strong free market tradition and nearly all of us would probably describe ourselves as libertarians or classical liberal &hellip; Continue reading &quot;NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:author\" content=\"https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-03-16T20:18:41+00:00\" \/>\n<meta name=\"author\" content=\"Colin Twiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Colin Twiggs\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2013\\\/03\\\/16\\\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2013\\\/03\\\/16\\\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\\\/\"},\"author\":{\"name\":\"Colin Twiggs\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/person\\\/d42b18d516a80149d739845749ac6454\"},\"headline\":\"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; 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He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008\\\/2009 and 2020 bear markets well ahead of actual events. He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.\",\"sameAs\":[\"https:\\\/\\\/facebook.com\\\/people\\\/The-Patient-Investor\\\/61572934660810\\\/\",\"https:\\\/\\\/www.instagram.com\\\/colin_thepatientinvestor\",\"https:\\\/\\\/au.linkedin.com\\\/in\\\/colintwiggs\"],\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/author\\\/investor\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist - the patient investor","robots":{"index":"noindex","follow":"follow"},"og_locale":"en_US","og_type":"article","og_title":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist - the patient investor","og_description":"Scott Sumner suggests that NGDP targeting is a far more conservative approach than the current inflation targeting practiced by the Fed and many other central banks: Most of the blogging Market Monetarists have their roots in a strong free market tradition and nearly all of us would probably describe ourselves as libertarians or classical liberal &hellip; Continue reading \"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist\"","og_url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/","og_site_name":"the patient investor","article_publisher":"https:\/\/www.facebook.com\/profile.php?id=61572934660810","article_author":"https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/","article_published_time":"2013-03-16T20:18:41+00:00","author":"Colin Twiggs","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Colin Twiggs","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/#article","isPartOf":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/"},"author":{"name":"Colin Twiggs","@id":"https:\/\/thepatientinvestor.com\/#\/schema\/person\/d42b18d516a80149d739845749ac6454"},"headline":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist","datePublished":"2013-03-16T20:18:41+00:00","mainEntityOfPage":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/"},"wordCount":248,"commentCount":0,"publisher":{"@id":"https:\/\/thepatientinvestor.com\/#organization"},"keywords":["Inflation","market monetarism","NGDP targeting"],"articleSection":["Banks &amp; Interest Rates"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/","url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/","name":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist - the patient investor","isPartOf":{"@id":"https:\/\/thepatientinvestor.com\/#website"},"datePublished":"2013-03-16T20:18:41+00:00","breadcrumb":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/16\/ngdp-level-targeting-the-true-free-market-alternative-we-try-again-the-market-monetarist\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/thepatientinvestor.com\/"},{"@type":"ListItem","position":2,"name":"NGDP level targeting \u2013 the true Free Market alternative (we try again) &#124; The Market Monetarist"}]},{"@type":"WebSite","@id":"https:\/\/thepatientinvestor.com\/#website","url":"https:\/\/thepatientinvestor.com\/","name":"The Patient Investor","description":"Smart. 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He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008\/2009 and 2020 bear markets well ahead of actual events. He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.","sameAs":["https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/","https:\/\/www.instagram.com\/colin_thepatientinvestor","https:\/\/au.linkedin.com\/in\/colintwiggs"],"url":"https:\/\/thepatientinvestor.com\/index.php\/author\/investor\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9tQ4n-1OY","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":7076,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/19\/fed-ngdp-targeting-would-greatly-increase-global-financial-stability-the-market-monetarist\/","url_meta":{"origin":7004,"position":0},"title":"Fed NGDP targeting would greatly increase global financial stability &#124; Market Monetarist","author":"Colin Twiggs","date":"March 19, 2013","format":false,"excerpt":"Lars Christensen describes how NGDP targeting would help the global economy withstand shocks like another eurozone crisis: Lets look at two different hypothetical US monetary policy settings. First what we could call an \u2018adaptive\u2019 monetary policy rule and second on a strict NGDP targeting rule. \u2018Adaptive\u2019 monetary policy \u2013 a\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7732,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/05\/12\/the-monetary-policy-revolution\/","url_meta":{"origin":7004,"position":1},"title":"The monetary policy revolution","author":"ColinTwiggs","date":"May 12, 2013","format":false,"excerpt":"James Alexander, head of Equity Research at UK-based M&G Equities, sums up the evolution of central bank thinking. He describes the traditional problem of inadequate response by central banks to market shocks like the collapse of Lehman Brothers: Although wages hold steady when nominal income falls, unemployment tends to rise\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5952,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/31\/should-the-fed-be-targeting-inflation\/","url_meta":{"origin":7004,"position":2},"title":"Why the Fed should not target inflation","author":"Colin Twiggs","date":"October 31, 2012","format":false,"excerpt":"Scott Sumner, Professor of Economics at Bentley University, proposes that the Fed target nominal growth in GDP (\"NGDP\") rather than inflation as Ben Bernanke has long advocated: \"Even he [Bernanke] must be surprised and disappointed with how poorly [inflation targeting] worked during the recent crisis.\" The primary problem, Sumner points\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13626,"url":"https:\/\/thepatientinvestor.com\/index.php\/2016\/07\/29\/why-the-fed-should-use-ngdp-targeting\/","url_meta":{"origin":7004,"position":3},"title":"Why the Fed should use NGDP targeting","author":"ColinTwiggs","date":"July 29, 2016","format":false,"excerpt":"Good point made by R.A. in The Economist as to why the Fed should target nominal GDP rather than inflation: One of the strongest points in favour of NGDP targeting, in my view, is that it implied a need for far more action from the Fed far earlier in this\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/07\/2016-07-29-ffr.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/07\/2016-07-29-ffr.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/07\/2016-07-29-ffr.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/07\/2016-07-29-ffr.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/07\/2016-07-29-ffr.png?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":6036,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/11\/06\/is-the-fed-finally-listening-to-scott-sumner\/","url_meta":{"origin":7004,"position":4},"title":"Is the Fed finally listening to Scott Sumner?","author":"Colin Twiggs","date":"November 6, 2012","format":false,"excerpt":"Brendan Greely writes of Scott Sumner. Sumner who holds a Ph.D. from the University of Chicago, made a suggestion in the late 1980s to the New York Federal Reserve. He proposed that the Fed set a target for nominal GDP\u2014real growth in GDP plus the rate of inflation. He felt\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7548,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/04\/24\/the-grave-evil-of-unemployment-bryan-caplan-econlog-library-of-economics-and-liberty\/","url_meta":{"origin":7004,"position":5},"title":"The Grave Evil of Unemployment, Bryan Caplan | EconLog | Library of Economics and Liberty","author":"ColinTwiggs","date":"April 24, 2013","format":false,"excerpt":"Bryan Caplan makes the case for a fresh approach from free-market economists: At the level of high theory, free-market economists love market-clearing models. If there's surplus wheat, the price of wheat will fall to clear the market. If there's surplus labor, similarly, the wage will fall to eliminate unemployment. What\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/7004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=7004"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/7004\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=7004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=7004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=7004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}