Those of us who favor a new monetary regime, in which the Fed would stop setting a target level for inflation and start targeting nominal spending instead, can rejoice at having apparently made an influential convert: Lawrence Summers.
Summers -- who was an architect of economic policy in the Clinton and Obama administrations -- announced his shift in thinking in a recent op-ed, and says he will explain his reasoning in more detail soon. Most of the piece is devoted to arguing that the Federal Reserve has erred in raising interest rates, even if one accepts the wisdom of inflation targeting.
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