Evan Koenig, a former senior aide at the Dallas Fed, dives deep into nominal GDP targeting and its potential to reshape monetary policy. He reveals why the Fed hasn't seriously considered this approach and how it could provide greater clarity to the public. Koenig discusses the practical applications of NGDP targeting and its compatibility with the Fed’s goals of employment and price stability. The conversation also touches on the implications of this strategy following COVID-19 and its role in fostering economic stability in turbulent times.

Evan Koenig, a former senior advisor at the Dallas Fed, delves into the fundamentals of nominal GDP targeting, including its PCE version. George Selgin responds to Chair Powell’s concerns, emphasizing how this framework can effectively manage supply shocks. They discuss the implications of NGDP targeting for economic stability, accountability in central banking, and highlight the importance of adapting monetary policy to real-time market expectations. This insightful conversation showcases diverse perspectives on the future of economic policy.