Monetary Policy Rules Work and Discretion Doesn’t: A Tale of Two Eras

Abstract

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 lecture concludes that rules‐based policies have clear advantages over discretion.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 158 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.