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Objective: to analyze the transformations in the Russian manufacturing industry associated with the massive renewal of the material and technical base of the machine-building sector.Methods: the article uses empirical, logical, comparative and statistical methods of analysis.Results: under the new sanctions, mechanical engineering, primary machine-building, should become the main area of transformations in the Russian industry, functioning on a new technological basis. The article analyzes the Russian machinebuilding sector and the development strategy of the manufacturing industry for the period up to 2035; the sources of financing of the Russian manufacturing industry are investigated; the current state of development of the Russian manufacturing sectors for January-March 2022 is shown; the anti-crisis measures of the Bank of Russia in the context of new economic sanctions are analyzed; a package of additional measures is considered related to the relief of credit overheating, accounts payable and receivables at Russian industrial enterprises in the short-, mediumand long-term.Scientific novelty: under the large-scale restructuring of the Russian economy, the Bank of Russia needs to switch to the nominal GDP targeting mode, to carry out the denomination of settlements and payments for export products in rubles tied to the target price of gold as a standard of value; to minimize and mitigate the risks of inflationary factors in industry by creating a Bank of bad debts.Practical significance: the main provisions and conclusions of the article can be used to carry out a large-scale modernization of the manufacturing industry of the Russian economy, ensuring the flow of modern technologies and products to the domestic market and taking into account the technical and economic features of the development of Russian regions.

This note provides a nontechnical summary of a research paper (Bullard and DiCecio [2021, Classical policy benchmarks for economies with substantial inequality, Federal Reserve Bank of St. Louis, unpublished manuscript]) that I presented as the NIESR 2021 Dow Lecture on 9 February 2021. In the paper, we construct a simple benchmark macroeconomic model with substantial heterogeneity among households, enough to generate empirically plausible Gini coefficients for the distributions of consumption, income and financial wealth. The model includes aggregate shocks as well as both permanent and temporary idiosyncratic uncertainties. Four policymakers—implementing monetary, fiscal, labour market and education policies—act in concert to achieve a first-best allocation of resources. We argue that the roles of these policymaker types are 'classic' and match up well with observed policymaker roles in OECD countries. We regard this simple economy as a benchmark for the study of other aspects of the interaction between policy and inequality. [ABSTRACT FROM AUTHOR]

Through the analysis of the interactions between monetary policy strategy and exchange rate regimes adopted in Morocco, the particularity of this article is that it does not study the impact of exchange rate policy and/or monetary policy on economic indicators, but rather to that, it analyzes the implication of the reform affecting exchange rate policy on the need for another reform affecting monetary policy. I thus show in this article that inflation targeting, which Bank Al-Maghrib plans to adopt following the gradual abandonment of the exchange rate anchor, is not adapted to the nature of economic shocks in Morocco and would only penalize the Moroccan economy. I therefore recommend as an alternative strategy, the possible adoption of nominal GDP targeting instead of inflation targeting, in order to improve the transmission of monetary policy to economic activity.

This paper studies fiscal policy in a model with nominal gross domestic product (GDP) targeting. We find that, with wage rigidity, nominal GDP targeting generates lower welfare losses than inflation targeting and a Taylor rule. On the other hand, adopting this regime makes standard fiscal policy rules, whereby distortionary tax rates are designed to respond to economic activity, dependent on the behavior of inflation instead. We also find that the fiscal multipliers with nominal GDP targeting are smaller than the multipliers under inflation targeting and the Taylor rule. Therefore, nominal GDP targeting does not necessarily outperform other monetary policy rules. [ABSTRACT FROM AUTHOR]

We study nominal gross domestic product (GDP) targeting as optimal monetary policy in a model with a credit market friction following Azariadis et al. (2018), henceforth ABSS. We extend the ABSS framework to allow for heterogeneous labor supply. We show that nominal GDP targeting continues to characterize optimal monetary policy in this setting. We also analyze the incomplete markets equilibrium that exists when the monetary policymaker pursues a suboptimal policy, and show how an extension to more general preferences can limit the ability of the policymaker to provide full insurance to households in this setting. [ABSTRACT FROM AUTHOR]

Some economists advocate nominal GDP targeting as an alternative to the Taylor Rule. These arguments are largely based on the idea that nominal GDP targeting would require less knowledge on the part of policymakers than a traditional Taylor Rule. In particular, a nominal GDP targeting rule would not require real‐time knowledge of the output gap. We examine the importance of this claim by amending a standard New Keynesian model to assume that the central bank has imperfect information about the output gap and therefore must forecast the output gap based on previous information. Forecast errors by the central bank can then potentially induce unanticipated changes in the short‐term nominal interest rate, distinct from a standard monetary policy shock. We show that forecast errors of the output gap by the Federal Reserve can account for up to 13% of the fluctuations in the output gap. In addition, our simulations imply that a nominal GDP targeting rule would produce lower volatility in both inflation and the output gap in comparison with the Taylor Rule under imperfect information. [ABSTRACT FROM AUTHOR]

Benhabib and Farmer show that in a laissez-faire one-sector real business cycle model under aggregate increasing returns, under sufficiently high degrees of productive externality, the demand-side effect in the labor market triggered by agents' expectations about the economy's future outweighs the supply-side effect, making agents' expectations become self-fulfilling. This paper analytically demonstrates that the conduct of monetary policy under nominal gross domestic product (GDP) targeting reinforces the supply-side effect in the labor market, thereby making belief-driven aggregate fluctuations more difficult to occur. This reinforcement effect on labor supply is absent under nominal consumption targeting and inflation targeting. Hence, under these two monetary regimes, the necessary and sufficient conditions for the economy to display equilibrium indeterminacy and sunspot fluctuations are identical to those in Benhabib and Farmer's laissez-faire economy. The results are robust to an endogenous growth extension of the model, implying that targeting the nominal GDP growth rate is more desirable than targeting the nominal consumption growth rate or the inflation rate in terms of macroeconomic stability. [ABSTRACT FROM AUTHOR]

In the literature on monetary economics, there is the 'inflationary bias' result which predicts that the rate of inflation will be biased towards a higher level under discretionary monetary policy than under a rule‐based policy regime. It is established that a credible nominal target can eliminate this 'inflationary bias'. In this paper, we examine the case of nominal GDP targeting, which is a rule‐based monetary regime. Depending on the degree of conservativeness by the central bank, we show in a stylized model the choice of different combination of inflation and real GDP targets can still result in an 'inflationary bias', and there also exists the possibility of a 'dis‐inflationary bias'. [ABSTRACT FROM AUTHOR]

The main purpose of this research paper is to determine whether Nominal GDP targeting as a monetary policy regime would be superior to Inflation targeting in minimising the South African Reserve Bank's loss function. This is done by algebraically deriving the necessary conditions for Nominal GDP targeting to dominate Inflation targeting using two different forms of loss functions. The first form includes price stability and output stability, while the second form includes both price and output stability and adds currency fluctuation into the loss function, both using data from 1993Q1 to 2014Q1 and uniquely incorporating data from the mining sector due to the sector's key role in the South African economy. Based on these results and practical issues of Nominal GDP targeting, such as the possibility of enhancing the severity of stagflation, this paper does not recommend Nominal GDP targeting as a monetary policy framework for South Africa.

It is known that the central banks, which are practicing the monetary policy, have performed different and important tasks since its foundation. On the other hand, Central banks are at the forefront of the institutions most frequently discussed in economic literature due to their duties that are discussed and executed after every change in the economic conjuncture. Changes in the economic and political system undoubtedly also have a direct impact on the central bank's duties, powers and choices in monetary policy. In the years when price stability was generally accepted, inflation targeting became the most preferred strategy in practice. This strategy, which has been effectively implemented to ensure price stability, has been effective for controlling inflation. However, the impact on other macroeconomic variables such as economic growth, employment, exchange rate and financial stability has been opened to debate especially after the 2008 Crisis. The aim of the study from these discussions is to make a healthy comparison of the nominal GDP targeting and inflation targeting, which is the common monetary policy strategy; central banking that prioritizes developmental goals and sheds light on the development adventure of central banking and causality relations emerging in this adventure. These different monetary policy strategies are how far will be a serious alternative. [ABSTRACT FROM AUTHOR]

Although a number of economists have tried to revive the idea of nominal GDP targeting since the financial crisis of 2008, very little has been said about how this objective might be achieved in practice. This paper adopts and extends a strategy first outlined by Holbrook Working and later employed in the P-Star model. It presents a series of theoretical and empirical results to argue that Divisia monetary aggregates can be controlled by the Federal Reserve and that the trend velocities of these aggregates exhibit the stability required to make long-run targeting of a nominal objective feasible. [ABSTRACT FROM PUBLISHER]