This idea that has been pushed by Market Monetarists-notably Scott Sumner-for a while seems to be an idea whose time has come. Or it might be. The Wall Street Journal and The Economist have mentioned it. It seems to have caught on with the New Kenyesians which was a key objective of Sumners for them to come around.
Now with Krugman, DeLong, and Yglesisas saying why not, that has happened. There was Obama's former CEA Christine Romer lending her support in a recent NYT op-ed. A major internal memo from Goldman Sachs has come to light supporting it.
It would seem to have a lot of interested parties now. What hasn't happened, at least not yet, is for the Fed to consider it. Bernanke was asked yesterday about it and seemed to demur. Though Sumner thinks he is actually much less dismissive than it might superficially appear.
What Bernanke did do was point out that the inflation concerns haven't had any validity and that it's "obviously employment" that they are failing on. That's a positive and it actually is out of the playbook of a recent speech by Chicago Fed President Charles Evans who had argued that the Fed should maybe point out that there is a dual mandate and as it is full employment that it is really failing at, any rate increase should be off the table until unemployment dips beneath 7 percent even if inflation did in the short term rise above the 2 percent target.
Perhaps the most impressive piece of affirmation NGDP targeting has gotten so far is from the Liberal MP Scott Brison who brought a motion before the Commons finance committee calling for it to hold “at least one meeting before the end of November 2011 to hear from witnesses, such as, but not limited to, members of the C.D. Howe Institute Monetary Policy Council, on whether or not the government of Canada and the Bank of Canada should consider other targets, such as but not limited to, nominal GDP or full employment.” This was a few weeks ago:
"Give Mr. Brison credit: He caught the wave just before it broke into the mainstream media. The Commons committee voted on Oct. 20 to hold a one-day session on NGDP targeting some time this month. Three days later, The Wall Street Journal reported that a growing number of economists and proponents are supporting the idea of having the Fed target nominal GDP — or GDP without stripping out inflation."