Chances are you’ve never heard of Scott Sumner, said Derek Thompson in TheAtlantic.com. But there’s an outside chance the Bentley University economics professor “just saved the economy.” For the past three years, Sumner has used his blog, TheMoneyIllusion.com, to make a wonky idea about U.S. monetary policy mainstream. He has argued that the Federal Reserve should focus less on keeping inflation low and concentrate instead on lifting nominal GDP, or GDP that hasn’t been adjusted for inflation. In other words, the Fed should set a goal for how fast the economy should grow, and then do everything in its power to get it there. Last week, Ben Bernanke “announced the closest thing” to that policy: Rather than stimulate the economy with a fixed amount of bond buying, as it has done in the past, the Fed will keep its foot on the gas pedal until the economy recovers.
Sumner’s been “incredibly influential” in popularizing the idea among academics, economists, and journalists, said Joe Weisenthal in BusinessInsider.com, and “the bipartisan swath of his adherents is remarkably rare for an economic pundit.” If the Fed’s actions improve the economy, then Sumner’s blogging on the once-eccentric idea “will deserve major credit.”