ABSTRACT
One issue in the discussion was a comparison between Ronald McKinnon’s recommendations and the McCallum rule. Can the findings in the McKinnon paper be viewed as either a competing rule or as an improvement of the rule for monetary policy suggested by Bennett McCallum? From the regressions, it seems as if the exchange rate has a strong influence on the price level. However, it was argued that these results do not suggest that a policy of stabilizing the exchange rate could in fact be used to stabilize, for example, the US price level; nor does it follow that fixing the exchange rate would be necessary or helpful in keeping the price level constant. If we want to be able to make any statement we would have to run simulations with a specific model or a system of regressions subjected to shocks actually observed and so on.
