Changing target

OVER a decade ago a frustrated Ben Bernanke, then an economics professor at Princeton University, called for Japanese central bankers to show some “Rooseveltian resolve” and to act more boldly as total nominal demand in Japan was “growing too slowly for the patient's health”. He might have been delivering a stern advance warning to himself in his current job as head of America's Federal Reserve. Judged by its record on inflation, the usual yardstick, the Fed is performing fairly well. But judged by the criterion Mr Bernanke had used for the Japanese economy in the late 1990s, something has gone badly wrong. America's nominal gross domestic product—GDP before adjusting for inflation—collapsed during the recession and is now nearly 12% below where it would be if its pre-recession trend had continued.