The Greenspan Era: Discretion, Rather than Rules
نویسندگان
چکیده
منابع مشابه
The Greenspan Era: Discretion, Rather than Rules
Policy rules . . . anticipate that key causal connections observed in the past will remain fixed over time. . . . But we have found that very often historical regularities have been disrupted by unanticipated change. . . . The evolving patterns mean that the performance of the economy under any rule, were it to be rigorously followed, would deviate from expectations. . . . In an ever changing w...
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4 Non-technical summary 5
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Kydland and Prescott first identified the inflationary bias that results when a central bank does not precommit to a monetary policy rule. Subsequent work, published over the past twenty five years, demonstrates that this inflationary bias can be minimized by appointing central bankers whose preferences or incentives differ systematically from those of society as a whole. Subsequent work also s...
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E conomic models with multiple equilib-ria, such as Diamond and Dybvig (1983), have become increasingly useful in analyzing volatility in financial markets and in business cycles. In many of these models, indeterminacy is a result of incomplete financial markets or technological nonconvexities. Here we identify economic policy discretion to be another distinct cause of indeterminate equilibrium...
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Discretion is examined as a feature of the design of rule-guided systems. That is, given that rules have to be administered by some group of persons, called adjudicators, and given that their goals may be different from society’s (or a relevant organization’s), when is it socially desirable to allocate discretionary authority to the adjudicators and, if so, to what extent? The answer reflects a...
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ژورنال
عنوان ژورنال: American Economic Review
سال: 2006
ISSN: 0002-8282
DOI: 10.1257/000282806777212251