He has serious doubts, and I agree.
Even in the 1930s, what I gather from Larry White's "Hayek's Monetary Theory and Policy: A Critical Reconstruction" (thanks to a comenter for sharing this the other day) is that what he was really talking about was a constant MV (and even that was after he was forced to clarify an earlier position of a constant M).
Now ask yourself - do you think Scott Sumner would like to see constant MV right now???
Elsewhere you can find talking about productivity norm (I haven't read Hayek as widely as others, but I've seen him raise this when he complains about being called a deflationist).
That's not NGDP targeting either.
The other thing you hear is that Hayek was clear he didn't want money expenditures to collapse in the Depression.
Well right. But that's not NGDP targeting either.
And then of course there's that pesky prize lecture of his:
"The theory which has been guiding monetary and financial policy
during the last thirty years, and which I contend is largely the product
of such a mistaken conception of the proper scientific procedure,
consists in the assertion that there exists a simple positive
correlation between total employment and the size of the aggregate
demand for goods and services; it leads to the belief that we can
permanently assure full employment by maintaining total money expenditure at an appropriate level.
Among the various theories advanced to account for extensive
unemployment, this is probably the only one in support of which strong
quantitative evidence can be adduced. I nevertheless regard it as
fundamentally false, and to act upon it, as we now experience, as very
The usual suspects are giving Bob trouble. Go over to the blog and defend common sense and objective readings of Hayek.
If Hayek were around today I bet he'd react to Sumner about the way Bob does. Sumner would rival Krugman on the list of guy's that bugged him.
Swiss National Bank vs. the Federal Reserve
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