ABSTRACT

Chapters 39 and 40 evaluated a strategy of targeting nominal income as one amongst a number of alternative policy regimes. Because the idea of targeting nominal income has been so influential in recent years, it is appropriate that we now spend a little more time on the proposal. This chapter aims at clarifying a number of issues raised by nominal income targeting. In particular,

it asks some questions about how it might be implemented in practice and

it draws attention to a number of analytical problems associated with the strategy.