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Please Abolish the Fed's Balance Sheet

Summary:
The Fed's balance sheet is causing misperceptions about the nature of good monetary policy, argues Scott Sumner. He says that the US would be better off without it.

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The Fed's balance sheet is causing misperceptions about the nature of good monetary policy, argues Scott Sumner. He says that the US would be better off without it.

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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