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Pranjul Bhandari
Pranjul Bhandari is a Mason Fellow at the Harvard Kennedy School. She has previously been Asia-Pacific Economist at Goldman Sachs and Economist at India’s Ministry of Finance. She has a Masters degree in Public Administration from Harvard, and Economics degrees from University of Cambridge, UK and St. Stephen’s College, Delhi. Her areas of interest are macroeconomics, financial markets and public policy.
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Targeting nominal GDP
Central banks, especially in developing countries, still seek transparent and credible communication. Yet signalling intentions in the conduct of monetary policy sometimes creates undesirable constraints. This column argues that it may be better to phrase central bank pronouncements in terms of nominal GDP, rather than in terms of inflation. If it is worth communicating a plan, it is worth choosing a plan that one can live with.
