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The Federal Reserve Must Modernize Its Approach

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How does the Federal Reserve correct its mistakes? Often it simply doesn't, Mercatus scholar Scott Sumner argues in an opinion piece for the Hill. He outlines in his new article how the Fed can more nimbly respond to changes in economic conditions.  Read more: The Federal Reserve must modernize its approach Photo credit: Richard Drew/AP/REX/Shutterstock

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How does the Federal Reserve correct its mistakes? Often it simply doesn't, Mercatus scholar Scott Sumner argues in an opinion piece for the Hill. He outlines in his new article how the Fed can more nimbly respond to changes in economic conditions. 

Read more: The Federal Reserve must modernize its approach

Photo credit: Richard Drew/AP/REX/Shutterstock

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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