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Economic ideas, the monetary order and the uneasy case for policy rules

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  • Laidler, David

Abstract

The problems posed by monetary policy cannot be successfully addressed by legislating enduring policy rules. With the passage of time, economic understanding does not systematically converge ever more closely on a “true” model of the economy, a process which is now sufficiently far along that our current ideas can form the basis for designing such measures. Rather, ideas evolve unsteadily and unpredictably, and disagreement about them is routine. They influence the behaviour of the economy and they are influenced by it as they develop, requiring policy principles to adapt as well. Monetary policy problems thus cannot be solved once and for all, but must be coped with continuously.

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  • Laidler, David, 2017. "Economic ideas, the monetary order and the uneasy case for policy rules," Journal of Macroeconomics, Elsevier, vol. 54(PA), pages 12-23.
    • Handle: RePEc:eee:jmacro:v:54:y:2017:i:pa:p:12-23
    DOI: 10.1016/j.jmacro.2017.01.004
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    References listed on IDEAS

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    Cited by:

    1. Gilberto Tadeu Lima & Mark Setterfield & Jaylson Jair da Silveira, 2023. "Achieving two policy targets with one policy instrument: heterogeneous expectations, countercyclical fiscal policy, and macroeconomic stabilization at the effective lower bound," Working Papers, Department of Economics 2023_01, University of São Paulo (FEA-USP).
    2. Glasner, David, 2017. "Rules versus discretion in monetary policy historically contemplated," Journal of Macroeconomics, Elsevier, vol. 54(PA), pages 24-41.

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    More about this item

    Keywords

    Monetary policy; Rules versus discretion; Gold standard; Revolutions in Macroeconomics;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925

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