Market Monetarism is more than NGDP Targeting

It’s true that I prefer NGDP Targeting like many other market monetarists. But I also think the Fed did a pretty good job during the Grand Moderation without NGDP Target.
In fact, market monetarism is mostly about another set of ideas.

The important thing here is to keep in mind that NGDP targeting is not on the list. I do not see this as an essential part of Market Monetarism, but of course, I do not deny that it is an important part of the appeal of Market Monetarism.

When we claimed the money was too tight in 2008-09, people thought we were crazy. Almost everyone thought that the policy was expansionary and the recession was caused by the financial crisis. If money was tight in 2008-09, it is quite plausible that the Great Recession was due to Fed policy, not financial turmoil.
The most important principles of market money are based on basic textbook economics, forgotten by the rest of the profession. Money matters. Recessions are monetary phenomena everywhere and at any time. Low interest rates don’t mean easy money. Monetary policy is highly effective at zero rates. The monetary stimulus doesn’t spend ammunition(but financial stimulus does). etc. etc. These were the things that were taught to economics students before 2007.
We actually advocate basic textbook ideas that have been almost completely abandoned by the rest of the profession. We want to go back to a time when it wasn’t “weird” to claim that the big drop in AD might have been due to tight money.

Market Monetarist framework includes more than Quantity Theory and NGDP Targeting. Because Quantity Theory and NGDP Targeting are products of this framework.

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