publication . Report . Preprint . Part of book or chapter of book . 1988

Rules Versus Discretion in Monetary Policy

Andrew D. Crockett;
Open Access
  • Published: 01 Feb 1988
  • Publisher: National Bureau of Economic Research
This paper examines the case for rules rather than discretion in the conduct of monetary policy, from both historical and analytic perspectives. The paper starts with the rules of the game under the gold standard. These rules were ill-defined and not adhered to; active discretionary policy was pursued to defend the gold standard -- but the gold standard came closer to a regime of rules than the current system. The arguments for rules in general developed by Milton Friedman are described mo appraised; alternative rules including the constant money growth ratio rule, interest rate rules, nominal GNP targeting, and price level rules are analyzed. Until 1977 the gen...
free text keywords: Discretion, media_common.quotation_subject, media_common, Discretionary policy, Monetary policy, Dynamic inconsistency, Monetary economics, Macroeconomics, Price level, Economics, Policy analysis, Interest rate, Gold standard, Business, Central bank, Price of stability
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