Read it at Interfluidity
I first “met” Haitao Zhang seven or eight ago, when we were both frequent commenters at Brad Setser’s remarkable blog. After I wrote about NGDP targeting, Zhang forwarded to me a paper he composed and sent around several years ago. He has graciously given me permission to republish it.
Haitao Zhang’s macro stabilization proposal
by Steve Randy Waldman
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Things are moving in the direction of fiscal rather than monetary in the face of the recent failure of even extreme monetary policy to address the fallout from the financial crisis and its contagion to the real economy, resulting in intractable high unemployment and a languid recovery.