Nominal GDP targeting fails in stagflation: as Friedman challenged Bob Perry's proposed 6% nominal GDP target, if you face 7% inflation and minus 1% real output you are in a recession with high inflation and cannot say everything is fine—exposing the same impossibility as the dual mandate, since monetary policy cannot resolve both objectives at once.

causalpending

Speaker

Michael Belongia

Evidence Quote

tell me what you do with your at your target for nominal GDP is 6% but you have 7% on prices and minus one unreal

Source

Michael Belongia on the Fed 01/11/2010EconTalk
Created: 6/15/2026, 9:37:51 AM

My Notes

Loading notes...