Comments on: Targeting Nominal GDP Futures Contract http://modeledbehavior.com/2009/09/16/targeting-nominal-gdp-futures-contract/ Sun, 12 Feb 2012 01:36:54 +0000 hourly 1 http://wordpress.com/ By: Bill woolsey http://modeledbehavior.com/2009/09/16/targeting-nominal-gdp-futures-contract/#comment-522 Sun, 27 Sep 2009 20:34:23 +0000 http://modeledbehavior.wordpress.com/2009/09/16/targeting-nominal-gdp-futures-contract/#comment-522 Positive shocks to productivity directly lower costs and provides a motivate to lower prices to increase the real volume of sales. Real output grows and prices fall in aggregate, just as they would in a single market with increased porductivity and an increase in supply.

The growth path of nominal incomes is unchanged.

If investment rises, then interest rates would have to increase. This would choke off less productive investments, so that nanobots could be funded. And, perhaps, it would choke of consumption, allowing more investmnet and saving. However, given nominal consumption, saving, and investment would allow for more real consumption and invetment with greater productivity and lower prices.

If there is a permanent increase the growth rate of productivity, then perhaps a reevaluation of the target for the growth rate of nominal income is in order.

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