Stanley Fischer is former central bank kingpin in Israel, where he amassed an enviable record of guiding the Mideast state through the global Great Recession with only a scrape or two.
Though he espouses adjustable inflation-targeting more than the locally preferred shooting for steady increases in nominal GDP (Market Monetarism), who knows?—it may amount to the same thing in practice.
That is to say, one central banker may say, “Inflation is too low, and we need to be a little flexible anyway, let’s do $85 billion a month in QE,” and the next may say, “NGDP is too low, let’s do $85 billion a month in QE.”
In practice, the same policy, despite all the complicated arguments behind each approach.
We can hope that Fischer is, at least, not peevishly fixated on obtaining microscopic rates of inflation, or even zero inflation, an idea now zealously touted by such monetary thinkers as John Cochrane of University of Chicago or Charles Plosser, the Philly Fed bank chief. With the PCE deflator at 1 percent, the stiff-necked “no inflation” crowd has near-guttural blood-lust to savage that last yet initial digit, economic growth be damned.
But Hopes May Be Dashed…
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*Photograph by Jerome Favre/Bloomberg