McCallum, Bennett T. <br/><br/>
The Present and Future of Monetary Policy Rules / 
Bennett T. McCallum. 
 - Cambridge, Mass.  National Bureau of Economic Research  2000. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w7916 .
 - Working Paper Series (National Bureau of Economic Research)  no. w7916. .
<br/><br/> September 2000. 
<br/><br/> To consider the prospects, looking 20-30 years into the future, for monetary policymaking in accordance with policy rules, one must evaluate their present importance.  That requires some definition of what constitutes rule-based monetary policy in practice, since no actual central bank will ever be literally bound by any simple formula (or any strict optimal control scheme).  Consideration of the rules-versus-discretion literature, plus more recent analysis by Woodford (1999), indicates that rule-based policy is conducted to satisfy relationships specified from a  timeless perspective.' Given this conception, it seems reasonably clear that today's prominent regimes (e.g., inflation targeting) do largely represent rule-based policymaking.  Whether these will prevail into the future will depend in part on political trends, but their fundamental soundness gives room for hope. Regarding the effects of a gradually diminishing role of money, it would appear that the feasibility and attractiveness of rule-based policymaking will not be seriously impaired so long as a tangible medium of exchange has some importance, even if small.  In the complete absence of monetary transactions, there would be no monetary policy of any type, rule-based or discretionary.  But it seems highly unlikely that money will disappear in the foreseeable future. 
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