Simple monetary rules: many strengths and few weaknesses

John Taylor

European Journal of Law and Economics, 2021, vol. 52, issue 2, No 5, 267-283

Abstract: Abstract This paper endeavors to examine the basic idea in Richard Epstein’s book Simple Rules for a Complex World. It does so by considering a specific simple rule which was explicitly designed for complex world. A basic idea in Epstein’s book is that the more complex is the world the better is the case for simple rules. To show this, he develops six simple rules pertaining to the rights of individuals, first possession, contracts, torts, government eminent domain and the power of taxation to provide public goods. This paper considers one rule rather than six rules, and it looks at monetary policy rather than policy in general. While the context is different, the case for simple rules made here provides a useful comparison with the case made by Epstein.

Keywords: Rules; Discretion; Complexity; Monetary policy; Taylor rule; Zero-bound (search for similar items in EconPapers)
JEL-codes: E1 E5 K1 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10657-020-09683-1

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