How Scott Sumner Will Triumph, and That Triumph Will Be His Defeat

He will triumph because, in the past, stabilizing NGDP would have been a cure for many macroeconomic woes.

This will be his ultimate defeat, because once NGDP is the target of policymakers, it will no longer function as it did in the past.

An analogy: a high fever has been a good sign that someone is very sick from an infection and might die soon. If the fever subsides, that has been a good sign the person is getting better.

But, if people begin to target the patient's temperature, then very sick patients will be put in ice water, etc. The temperature will cease to function as an accurate gauge of health precisely because it is now being targeted directly.


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