Really great links - left-wing support for nominal GDP targeting - China bubble

Liberal think-tank supports NGDP targeting, the idea associated in the blogosphere with the right-winger Scott Sumner - Centre Forum - start targeting nominal GDP until the output gap is closed - "The markets need to know that the Bank will not rest until the economy is growing fast enough to close the output gap. So CentreForum’s first recommendation is for the Bank explicitly to target high growth in nominal GDP (NGDP) for the next five years.
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Finally, the political economy of central bank independence provides another reason to support NGDP targeting. The Bank needs to maintain popular support if it is to manage long term price expectations. A persistent failure to return the economy to growth may pose a larger risk to Bank independence than a change in targeting methodology. If the economy stays weak and the output gap remains unclosed, the government’s fiscal problems may well get worse, and fears of a truly inflationary solution to the crisis will grow. As former MPC member Sir John Gieve said in February 2009: “The Bank and MPC need to convince [the general public] that the policy we are pursuing is the best way of restoring growth and full employment without reawakening inflation”."

Edward Chancellor - China's Red Flags (free reg. required) - "In fact, bubbles can be identifi ed ex ante, as the economists like to say. There also exists an interesting, if rather neglected, body of research on leading indicators of fi nancial distress. A few years ago, many of these indicators were pointing to rising economic vulnerability in the United States and other parts of the globe. Today, those red fl ags are fl ying around Wall Street’s current darling, The People’s Republic of China."