Some Political Economy of Monetary Rules

摘要

In this paper, I evaluate the efficacy of various rules for monetary policy from the perspective of political economy. I present several rules that are popular in current debates over monetary policy as well as some that are more radical and hence less frequently discussed. I also discuss whether a given rule may have helped to contain the negative effects of the recent financial crisis. My political economy perspective, to be discussed in much more depth in subsequent sections, evaluates political-economic proposals by taking into account both incentive and knowledge problems. I focus on how such rules function, the conditions under which they can be expected to achieve macroeconomic stability, and the plausibility of implementing them should the desire to do so arise.