“There is no laissez faire in fiat money. If the Fed holds the money supply constant, it will be changing the interest rate and the price level. And if it holds interest rates constant, it loses control over the price level and money supply. As a result, many economists now favor some sort of inflation-targeting regime. The most famous example is the Taylor Rule, which did keep inflation tolerably low and stable for two decades. But inflation targeting has several defects that in my view make nominal income (or GDP) stabilization a better goal.” Read more.