Monetary Policy Rules Work and Discretion Doesn’t: A Tale of Two Eras
John Taylor ()
No 11-019, Discussion Papers from Stanford Institute for Economic Policy Research
This lecture examines monetary policy during the past three decades. It documents two contrasting eras: first a Rules-Based Era from 1985 to 2003 and second an Ad Hoc Era from 2003 to the present. During the Rules-Based Era, monetary policy, in broad terms, followed a predictable systemic approach, and economic performance was generally good. During the Ad Hoc Era monetary policy is best described as a “discretion of authorities” approach, and economic performance was decidedly poor. By considering alternative explanations of this policy-performance correlation and examining corroborating evidence, the paper concludes that rules based policies have clear advantages over discretion.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (37) Track citations by RSS feed
Downloads: (external link)
Journal Article: Monetary Policy Rules Work and Discretion Doesn't: A Tale of Two Eras (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:sip:dpaper:11-019
Access Statistics for this paper
More papers in Discussion Papers from Stanford Institute for Economic Policy Research Contact information at EDIRC.
Series data maintained by Anne Shor ().