Scott Sumner is a monetary economist with the Mercatus Center. He famously argued in late 2008 that the Fed was too tight with monetary policy, and eventually he has convinced many economists of his views. In this episode he explains why interest rates and even monetary aggregates are not good indicators of the stance of monetary policy, whereas NGDP growth is much better.
Mentioned in the Episode and Other Links of Interest:
Scott Sumner’s Mercatus page and his blog, The Money IllusionScott argues the Fed through 2012 had been tightScott’s older book The Midas ParadoxScott’s forthcoming book The Money IllusionBob’s review of The Midas Paradox and his assessment of Market MonetarismEconTalk interview with Michael Belongia (which brings up Milton Friedman’s critical comments about NGDP targeting)