Few things have confused me more than the seeming shift in opinion among (blogosphere) Austrians in about the summer or fall of 2011 into a strong embrace of market monetarism and NGDP targeting. Only slightly less confusing to me is the hostility of many market monetarists to Keynesians, who I think are far more in tune with them. Some market monetarists seem genuinely unaware that Keynesians are in tune with them, mistaking "liquidity traps make fiscal policy very reasonable" for "liquidity traps mean we should completely forget about monetary policy". Some are aware of this and just really don't like the prospect of reliance on fiscal policy.
As I've said to others in the past - if you Austrians really are OK with market monetarism, then you should stop arguing with us and demand (as long as we still have a Fed - which looks likely for the duration of this depression at least) substantial monetary expansion. Many Austrians seem willing to back market monetarism in theory. I don't know if I've seen any lambast Bernanke for not being aggressive enough. John Papola has brought up NGDP targeting with me a lot over the last several months. I tell him fine - make your next video about how Bernanke should do NGDP targeting and pursue more expansionary policy. So far he doesn't seem interested in that. I daresay 95% of his fans would be shocked if he were to ever do that.
Jonathan tries to parse the Austrian relationship with market monetarism here (that's what motivates this post).
However, not everyone is fooled.
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