TY  - JOUR
AU  - Hall,Robert E.
AU  - Mankiw,N. Gregory
TI  - Nominal Income Targeting
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4439
PY  - 1994
Y2  - October 1994
UR  - http://www.nber.org/papers/w4439
L1  - http://www.nber.org/papers/w4439.pdf
N1  - Author contact info:
Robert E. Hall
Hoover Institution
Stanford University
Stanford, CA  94305-6010
Tel: 650/723-2215
E-Mail: rehall@gmail.com

N. Gregory Mankiw
Department of Economics
Littauer 223
Harvard University
Cambridge, MA  02138
Tel: 617/495-4301
Fax: 617/495-7730
E-Mail: ngmankiw@fas.harvard.edu
M1  - published as Robert E. Hall, N. Gregory Mankiw. "Nominal Income Targeting," in N. Gregory Mankiw, ed., "Monetary Policy" The University of Chicago Press (1994)

AB  - This paper discusses nominal income targeting as a possible rule for the conduct of monetary policy. We begin by discussing why a rule for monetary policy may be desirable and the characteristics that a good rule should have. We emphasize, in particular, three types of nominal income targets, which differ in how they respond to past shocks, to prices, and real economic activity. A key question is how any of these rules might be implemented in practice. We suggest that the consensus forecast of future nominal income could playa role in ensuring that the central bank does not deviate from its announced target. To show how economic performance might have differed historically if the Fed had been committed to some type of nominal income target, we offer simulations of a simple model of the economy. According to the simulations, the primary benefit of nominal income targeting would have been reduced volatility in the price level and the inflation rate. Whether real economic activity would have been less volatile is unclear.
ER  -