Comments on Bennett T. McCallum, “The Case for Rules in the Conduct of Monetary Policy: A Concrete Example” and on Alan S. Blinder, “The Rules-versus-Discretion Debate in the Light of Recent Experience”

doi:10.4324/9780429033360-6

Chapter

Comments on Bennett T. McCallum, “The Case for Rules in the Conduct of Monetary Policy: A Concrete Example” and on Alan S. Blinder, “The Rules-versus-Discretion Debate in the Light of Recent Experience”

Chapter

ABSTRACT

The papers by Alan Blinder and Bennett McCallum contribute greatly to a clarification of the debate on rules versus discretion. In the present comment, we begin with the problem of defining rules (Section 1). We believe that general rules of conduct ought to be added to the debate and we develop their role in the field of policy design (Section 2). We then discuss the problem of optimum and stabilization (Section 3) and we end with a discussion of “instrument-based rules” versus “outcome-based rules” (Section 4).