A NOTE ON RULES VERSUS DISCRETION DEBATE IN THE CONDUCT OF MONETARY POLICY

Yıl 1996, Cilt: 14 Sayı: 1, 63 - 70, 31.07.1996

Erdinç Telatar

Öz

This paper, using straightforward calculusr
analyzes the relevance of commitment
in monetary policy. Lucas supply function has played a central role in the
rules versus discretion debate. A generalized representation of Lucas supply
function is presented, in order to investigate
the role of supply function in the debate. Specifically, if both unanticipated
and anticipated inflation rates affect the real output the relevance of
commitment in the debate depends on the coefficients of the supply
function.

Anahtar Kelimeler

Monetary policy, Commitment, Supply function, Inflation, Policy debate

Kaynakça

• Barro, R.J., 1977, "Unanticipated Money Growth and Unemployment in the United States”, American Economic Review, C. 86, S. 549-580. Barro, R.J, D.Gordon, 1983a, "A positive.theory of monetary policy in a natural rate model", Journal of Political Economy, 91:589 610.
• Barroi R.J. D.Gordon, 1983b, "Rules, discretion and reputation in a model of monetary policy", Journal of Monetary Economics, 12:101-122.
• Blackburn, K, M.Christensen, 19891 "Monetary Policy and Policy Credibility: Theories and Evidence", Journal of Economic Literature, 27:1-45.
• Canzoneri, M.B., 1985, "Monetary policy games and the role of private information", American Economic Review, 75: 1056-1070.
• Fischer, S., 1990, "Rules Versus Discretion in MonetabY Policy", In Friedman, B.M. and Hahn, F.N (Eds.), Handbook of Monetary Economics, New York: Elsevier Science Publisher.
• Fischer, S.. 1995a, "Modern Approaches to Central Banking", NBER Working Paper, No. 5064.
• Fischer, S. , 1995b, "Central-Bank Independence Revisited", American Economic Review, 85. 201-206. Frydman, Rt P.Rapport, 19871 "Is the Distinction Between Anticipated and Unanticipated Money Growth Relevant in Explaining Output?", American Economic Review, 77; 693-703.
• Kydland, F.E, E.C.Prescott, 1977, "Rules rather than discretion: The inconsistency of optimal plans", Journal of Political Economy, 85: 473-492.
• McCallum, B. "Two Fallacies Concerning Central Bank Independence", NBER Working Paper, No. 5075. Mishkin, F. T 1982, "Does Anticipated Money Matter? An Econometric Investigation"t Journal of Political Economy, 90: 22-51. Mishkin, F., 1983, A Rational Expectations Approach to Macroeconometrics, Chicago: University of Chicago Press.
• Rogoff•, K., 19851 "The optimal degree of commitment to an intermediate target", Quarterly Journal of Economics, 100: 1169-1190.