David, I don´t think the problem with level NGDP targeting has much to do with data revisions. Take 2008. The Fed "purposely" tanked down the stable level path that had "endured" for more than 15 yrs. To try to go back would have shown everyone that the Fed had messed-up, an historical no-no!. Instead, Bernanke was lauded as "saviour" for avoiding a second Great Depression, but few saw that he had "engineered" a Long one. After Covid-19 hit, Powell got NGDP back very quickly to the previous trend. The drop, as everyone knew was the fault of Covid. He brought the NGDP level above the previous one, getting a little closer to the original one. Powell should try to keep NGDP riding along this new trend. My latest, with links to this question:
This will be a godsend as I despise "listening to" economics. I need to constantly stop and say, "What??? That can't be true" and the work out how it could be true.
The lesson I take from your write-up of this session is whether the policy maker should be optimizing and running a risk large errors or satisficing to do well enough with less chance of error
David, I don´t think the problem with level NGDP targeting has much to do with data revisions. Take 2008. The Fed "purposely" tanked down the stable level path that had "endured" for more than 15 yrs. To try to go back would have shown everyone that the Fed had messed-up, an historical no-no!. Instead, Bernanke was lauded as "saviour" for avoiding a second Great Depression, but few saw that he had "engineered" a Long one. After Covid-19 hit, Powell got NGDP back very quickly to the previous trend. The drop, as everyone knew was the fault of Covid. He brought the NGDP level above the previous one, getting a little closer to the original one. Powell should try to keep NGDP riding along this new trend. My latest, with links to this question:
https://marcusnunes.substack.com/p/macroeconomic-cycles-over-the-past-a17
This will be a godsend as I despise "listening to" economics. I need to constantly stop and say, "What??? That can't be true" and the work out how it could be true.
The lesson I take from your write-up of this session is whether the policy maker should be optimizing and running a risk large errors or satisficing to do well enough with less chance of error