should monetary policy be made rule or discretion.pptx - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. Check all that apply. To understand and appreciate how the suggestions for policy rules Anthropology ; Art & Humanities ; History ; Philosophy ; Political Science ; Psychology ; Religion For this assignment you are required to find 8-9 articles (preferably reputable/scholarly articles) that provides supporting information to back up … In more recent treatments of optimal monetary policy, discretion can still lead to inefficient outcomes which some type of commitment may overcome. In the United States , monetary policy is controlled by the U. 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Recently proposed legislation in Congress has picked up on this ongoing debate by asserting that the Federal Reserve should … This question addresses the issue of whether monetary policy should be made by discretionary policy or be implemented according to a set of rules. Should monetary policy be made by rule rather than by discretion? Discretion. Henry Simons first raised this issue in 1936 as a choice between rules and authorities, terms little different from those used in recent discussions. Answer to: Should monetary policy be made by rule rather than by discretion? The discretion policy rule in a monetary policy environment is to preserve the policy concept. If monetary policy is under the control of a politician who has complete discretion, the tendency will be to use monetary policy to juice the economy, enhance growth and … Please help. This paper was initially presented at the Federal Reserve Bank of Boston, Annual Conference, ‘Are Rules Made to Be Broken? Discretion Revisited: A Proposal to Make the Strategy of Monetary Policy Transparent, Robert L. Hetzel argues that the Federal Open Market Committee (FOMC) should articulate a consistent strategy for achieving its objectives. 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. 2. Federal Reserve Chairman Alan Greenspan uses a variety of information to determine whether the Federal Reserve should act. Monetary policy, therefore, should prevent the supply of money from getting too far out of balance with the demand for money. For a detailed explanation of why monetary policy created by rules can be ever more arbitrary than that made by human decision makers, see my previous post here. The paper starts with the rules of the game under the gold standard. 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