Scott Sumner

Scott B. Sumner (born 1955) is an American economist and political activist for the Democratic Party (United States). He is the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University, a Research Fellow at the Independent Institute, and professor who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Federal Reserve and other central banks should target nominal GDP, real GDP growth plus the rate of inflation, to better "induce the correct level of business investment".[1]

Scott Sumner
Born1955 (age 65–66)
NationalityUnited States
FieldMonetary economics
School or
Market monetarism
Alma materUniversity of Chicago (Ph.D.) University of Wisconsin (B.A.)
InfluencesMilton Friedman
Information at IDEAS / RePEc

In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.[2]

After Ben Bernanke's announcement on September 13, 2012 that the Fed would issue a new round of quantitative easing, which open-endedly committed the FOMC to purchase $40 billion agency mortgage-backed securities per month until the "labor market improves substantially", some media outlets began hailing him as the "blogger who saved the economy", for popularizing the concept of nominal income targeting; however, Sumner has received criticism from most economists who don't take his theory seriously. [3][4][5]

Academic careerEdit

Sumner received a PhD in economics from the University of Chicago in 1985. His limited published research focuses on prediction markets and monetary policy.[6]

In the wake of the 2008 financial crisis, Sumner began authoring a blog where he vocally criticized the view that the United States economy was stuck in a liquidity trap.[7] Sumner advocates that central banks such as the Federal Reserve create a futures market for the level of nominal gross domestic product (NGDP, also known as nominal income), and adjust monetary policy to achieve a nominal income target on the basis of information from the market. Monetary authorities generally choose to target other metrics, such as inflation, unemployment, the money supply or hybrids of these and rely on information from the financial markets, indices of unemployment or inflation, etc. to make monetary policy.[8]

Sumner also uses his blog to promote democratic candidates, and democrat policies. As a political activist, he has called his political opponents: "the American Taliban". [9]

In 2015, Sumner published The Midas Paradox: A New Look at the Great Depression and Economic Instability. The book argued that the Depression was greatly extended by repeated gold market shocks and New Deal wage policies.

Market monetarismEdit

A school of economics known as market monetarism has coalesced around Sumner's views; The Daily Telegraph international business editor Ambrose Evans-Pritchard has referred to Sumner as the "eminence grise" of market monetarism.[10] In 2012, the Chronicle of Higher Education referred to Sumner as "among the most influential" economist bloggers, along with Greg Mankiw of Harvard University and Paul Krugman of Princeton.[11] In 2012, Foreign Policy ranked Sumner jointly with Federal Reserve chair Ben Bernanke 15th on its list of 100 top global thinkers.[12]

Nominal GDP targetingEdit

Sumner contends that inflation is "measured inaccurately and does not discriminate between demand versus supply shocks" and that "Inflation often changes with a lag...but nominal GDP growth falls very, very quickly, so it'll give you a more timely signal stimulus is needed".[13] He argued that monetary policy can offset fiscal austerity policies such as those pursued by the British government in the wake of the 2007 economic crisis.[13]

In April 2011, the Reserve Bank of New Zealand responded to Sumner's critique of inflation targeting, arguing that a nominal GDP target would be too technically complicated, and make monetary policy difficult to communicate.[14] By November 2011, however, economists from Goldman Sachs were advocating that the Federal Reserve adopt a nominal income target. Nathan Sheets, a former top official at the Federal Reserve and the head of international economics at Citigroup, proposed that the Federal Reserve adopt a nominal consumption target instead.[15]

Sumner has argued that one cannot account for the impact of fiscal policy without first considering how monetary policy may affect the outcome; fiscal stimulus may not succeed if monetary policy is tightened in response. Economic journalists have referred to this as the Sumner Critique, akin to the Lucas critique.[16] Summarizing this thinking, The Economist suggested that

the economy will almost certainly not grow at a 5.3% rate no matter what Congress does. Arguments to the contrary are subject to what econ bloggers have come to call the Sumner Critique, after economist and blogger Scott Sumner. It is reasonable to assume, by this critique, that the Federal Reserve has a general path for unemployment and inflation in mind and it will react to correct any meaningful deviation from that path. A 5.3% growth rate is well outside the range of current Fed projections. Growth that rapid would almost certainly bring down unemployment quite quickly, triggering Fed nervousness over future inflation and prompting steps to tighten monetary policy.[17]

Personal lifeEdit

Well known in Bentley's economics department as a "technophobe," Sumner, who purchased his first cell phone in 2011, apparently "triggered expressions of surprise and amusement when he informed his colleagues that he was starting a blog."[1]



  • Sumner, Scott B. (2021). The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy. Chicago: University of Chicago Press. ISBN 978-0226773681.
  • Sumner, Scott B. (2015). The Midas Paradox: A New Look at the Great Depression and Economic Instability. Independent Institute. ISBN 978-1-59813-150-5.
  • Sumner, Scott B. (2015). "What Would Milton Friedman Have Thought of Market Monetarism?". In Cord, Robert A.; Hammond, J. Daniel (eds.). Milton Friedman: Contributions to Economics and Public Policy. Oxford University Press. pp. 246–264. ISBN 9780198704324.
  • Sumner, Scott B. (2012). "5. How Nominal GDP Targeting Could Have Prevented the Crash of 2008". In Beckworth, David (ed.). Boom and Bust Banking: The Causes and Cures of the Great Recession. Independent Institute. pp. 129–165. ISBN 978-1-59813-076-8.


The HillEdit

U.S. News & World ReportEdit

  • Sumner, Scott (December 26, 2017). "Low Inflation Nation". U.S. News & World Report. Retrieved April 18, 2021.
  • Sumner, Scott (July 10, 2017). "Demystify the Fed". U.S. News & World Report. Retrieved April 18, 2021.
  • Sumner, Scott; Horan, Patrick (May 30, 2017). "Fed Up With Congress". U.S. News & World Report. Retrieved April 18, 2021.

Mercatus CenterEdit

Cato InstituteEdit


See alsoEdit


  1. ^ a b Greeley, Brendan (1 November 2012). "The Blog That Got Bernanke to Go Big". Bloomberg Businessweek.
  2. ^ O'Brien, Matthew (2 May 2012). "A Rebellion at the Federal Reserve?". The Atlantic.
  3. ^ "Why Am I Arguing with Scott Sumner?". Uneasy Money. 2012-01-20. Retrieved 2021-09-09.
  4. ^ "A quick response to Scott Sumner". Paul Krugman Blog. 2009-03-02. Retrieved 2021-09-09.
  5. ^ Thompson, Derek (14 September 2012). "The Blogger Who Saved the Economy". The Atlantic.
  6. ^ "Scott B. Sumner". Bentley University. Retrieved 2011-01-18.
  7. ^ Krugman, Paul (2 March 2009). "A Quick Response to Scott Sumner". New York Times. Retrieved 2011-01-18.
  8. ^ Sumner, Scott (14 December 2010). "Money Rules". The National Review. Retrieved 2011-01-18.
  9. ^ "Discount code for my new book". TheMoneyIllusion. Retrieved 2021-09-09.
  10. ^ Evans-Pritchard, Ambrose (27 November 2011). "Should the Fed save Europe from disaster?". The Telegraph. Retrieved 2011-12-01.
  11. ^ Berrett, Dan (8 January 2012). "'Dim Sum for the Mind': Economics Blogs Engage Policy Wonks and Students". Chronicle of Higher Education.
  12. ^ Wittmeyer, Alicia P. Q. (November 26, 2012). "The FP Top 100 Global Thinkers". Foreign Policy. The Slate Group. Retrieved 2012-11-26.
  13. ^ a b Hamilton, Scott (2011-04-10). "Bank of England Should Replace Inflation Targeting, Sumner Says". Bloomberg. Retrieved 2011-04-13.
  14. ^ "Reserve Bank rejects report on system flaws". NZPA. 13 April 2011. Retrieved 2011-04-15.
  15. ^ Sumner, Scott. "Monetary regimes in your review mirror may be closer than they appear". Retrieved 2011-12-01.
  16. ^ Yglesias, Matthew (18 May 2012). "Don't Believe The "Taxmageddon" Hype". Slate. Retrieved 2012-05-29.
  17. ^ "Fiscal cliffs, multipliers, and the myth of central bank independence". The Economist. 23 May 2012. Retrieved 2012-05-29.

External linksEdit