Must-Read: Ryan Avent: Making Monetary Policy Great Again

Must-Read: Ryan Avent over at Democracy, making the argument for a monetary policy regime change http://democracyjournal.org/magazine/45/making-monetary-policy-great-again/:

Historically, when monetary “regime change” has occurred—when the public has been jolted out of a bad equilibrium into a good one—it is as a result of a political shift. It was Roosevelt that delivered regime change—by suspending gold convertibility—not the Federal Reserve. It was Richard Nixon who ended America’s role in the international gold standard set up after the second world war. In Britain, it was the government of Margaret Thatcher that engineered a disinflationary recession, and a political commitment to Paul Volcker by Jimmy Carter and Ronald Reagan that facilitated the end of high inflation in America. In Japan, where nominal GDP is at last rising in sustained fashion, it was the election of Shinzo Abe, who essentially ran on a platform of monetary regime change (and nationalism), that made the difference.