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MACROECONOMICS
Given its advantage it seems attractive to prescribe a stable nominal
income as the short-run goal of monetary policy and continuing to have
price stability as a long-term goal. Despite its theoretical advantage, there
are implementation difficulties, however. First, a short-run nominal income
target can be met with precision if monetary policy is able to react, which,
in turn, requires
SUFFICIENTLY
PRECISE
FORECASTING
values of nominal GDP. The
technical skills of the central bank would have to be of a high order to provide
the information at an early stage so that the monetary authority can act on
it. Otherwise, ...
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