-ngdp targeting keeps total nominal (before accounting for inflation) spending growth on a steady path, with the fed changing the money supply with demand (increase supply when liquidity is needed) -for example, if the long-run growth rate is 3% and the ngdp target rate is 5%, the fed would boost the money supply enough to increase nominal income by 5% (which equals 3% real growth and 2% inflation) -using ngdp targeting money creation is dependent on money demand
United States