Anyway, all this has me recalling the keynote lecture by Robert Hall at this past summer's AAEA meetings. He seemed to get the basic economics right (as he obviously should) and talked about some interesting ideas, like moving from an income tax toward a consumption tax as a way to spur spending. The essential underlying motive to spend more in the present is a lot like inflation targeting. And some aspects of a consumption tax do make sense to me. But he didn't mention inflation targeting.

So I asked him in the Q&A about inflation targeting and why the Fed wasn't at least attempting it. His answer completely stumped me: He said, in effect, that if the Fed were to target inflation it might not work, and if it didn't work, then everyone would lose faith in the Fed, and that would then hurt efficacy of the Fed's actions going forward. In other words, they shouldn't try to be effective because then they might lose effectiveness.