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Regime Change Roundup

A wink and a nudge from HM Treasury – Bloomberg report “Carney Said to Have Met U.K. Aide to Discuss BOE Remit” which follows the FT splash on a possible Budget announcement.

Vince Cable has the obligatory reference to NGDP in his tour through macro history for the New Statesman, and does so again in a Guardian interview.

William le Breton and Theo Clifford have written for Lib Dem Voice on NGDP targeting; Theo makes “The case for NGDP targeting“, and Bill thinks we’ve passed “The turning point.”

Endorsement of a mandate change come from James Barty at the Policy Exchange think-tank, though he prefers a Fed-like dual mandate.

In his FT “A-List” blog, Stephen King is moderately in favour of a switch to targeting NGDP, noting that supply-side, microeconomic reform is then assigned to improving the output/price split, in a parallel with the 1980s macro policy framework.  Sticking with the FT, any guesses what Samuel Brittan proposes for the Bank’s new mandate?

The Economist again repeats their (rather vague) call for an NGDP target in this week’s leader… as well as doing some fiscal stuff.

A surprise and welcome entry to the macro debate from the right – Nigel Farage writes for City AM claiming a stake staking a claim to be the first political party leader to endorse a “looser” Bank of England mandate, but does not set out a specific route forward.  It is really good to see wider political interest in this debate.  Lars responds appropriately; we need a tighter mandate (less flexible, less discretion) and looser policy in the short run.

Osborne can position himself as a monetary hawk to the right of Farage by endorsing a tight mandate… NGDP level targeting.

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Categories: Monetary Policy
  1. SK
    March 14, 2013 at 10:55

    Disagree. Osborne is not a hawk on monetary or fiscal matters.
    We all know he has not decreased the debt and he is very happy for the BoE to print as much as they want without actually paying any attention to the inflation.

    I think he has decided to sit on the fence (and let BoE try something) and that is the problem we are facing. We have lost 3 years and it is obvious since:
    -Hawks are disappointed because inflation was left uncontrolled.
    -Doves are disappointed because not enough stimulus was done.

    • March 14, 2013 at 11:00

      I have no idea what Osborne “is” right now; I merely suggested how he could position himself.

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