NGDP level targeting versus inflation targeting

Reply to David Andolfatto by Scott Sumner

Mark A. Sadowski comments by linking to Woodford interview

And in an interview with Dylan Matthews in September 2012, a couple of weeks after his Jackson Hole speech, Woodford stated that he believed the optimum policy is in fact an Output Gap Adjusted Price Level Target (OGAPLT): 

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/15/michael-woodford-i-personally-would-have-gone-further-but-what-the-fed-did-is-definitely-a-step-in-the-right-direction/ 

An OGAPLT is a corrected PLT where some multiple of the real output gap is added to it. Woodford prefers this modification of PLT because he thinks it is important to also take into account the level of real economic activity. But he also pointed out that NGDP Level Targeting (NGDPLT) is more practical, and is nearly as ideal as OGAPLT. That's why he spoke about NGDPLT at length in his speech at Jackson Hole: 

http://kansascityfed.org/publicat/sympos/2012/mw.pdf

OGAPLT seems similar to Yellen's optimal path policy and/or Yellen could easily move from one to the other.

Summers seems like Mr. Discretionary, but I could be wrong. As Sadowski comments further:

NGDPLT is a rules based policy as opposed to a discretionary policy. Normally people think of discretionary monetary policy as being better in times of high unemployment. But in this particular instance we already essentially have a discretionary monetary policy and it has resulted in a prolonged large output gap with a lengthy spell of elevated unemployment. An NGDPLT rule would prescribe closing the 15% and growing NGDP level gap in a timely fashion as opposed to our current implicitly discretionary policy.

And Woodford's OGAPLT would take the output gap into account as well. Bernanke notes the output gap but seems to show little urgency to close it as quickly as possible. He warns of "losing credibility" over keeping inflation low, but I don't know why. Is it an excuse to mask the politics of the situation with conservatives pushing for tight money?