Bretton Woods as a "guardrails" approach to monetary policy

Source: EconLog
by Scott Sumner

"I now favor a monetary policy rule that I have dubbed the 'guardrails' approach, although a more accurate metaphor might refer to the beeper you hear if you are about to hit a car in the front or rear when parallel parking. Under this approach, the Fed would offer to sell unlimited NGDP futures contracts at a price featuring 5% growth, and also offer to buy unlimited NGDP futures contracts at a price featuring 3% NGDP growth. Someone expecting more than 5% NGDP growth would buy these contracts from the Fed, and profit if growth did indeed exceed 5%. A bearish investor would sell 3% NGDP futures contracts to the Fed, anticipating sub-3% growth. Because this is an unfamiliar concept, I'd like to compare it to the Bretton Woods regime." (04/24/17)

http://econlog.econlib.org/archives/2017/04/bretton_woods_a.html