nominal GDP target

Instead of directly targeting a specific rate of inflation, a central bank may target a fixed rate of nominal GDP growth, which is equal to the rate of inflation plus the rate of 'true' (inflation-adjusted) GDP growth.

This builds in a sort of automatic stabilization: it will correspond to a smaller inflation target when GDP growth is strong, but allow greater inflation (easier monetary policy) when growth is weak. The hope is that committing to a nominal GDP target causes people to expect and so price in the benefits of this sort of policy. If the Fed credibly commits to easy money until some rate of growth is achieved, people will be more willing to make long-term loans.