Nominal GDP and inflation targeting could go hand-in-hand as part of a radical policy to stimulate the economy, according to professor Michael Woodford of Columbia University.

Woodford, speaking at the London Business School alongside Adair Turner, the head of the UK's Financial Services Authority (FSA), advocated a monetary policy framework where central banks essentially set policy to achieve a designated nominal GDP (NGDP) level, subject to hitting a medium-term inflation target.

Under such a