Time to abandon discretionary-based monetary policy


SHOULD the US Federal Reserve Bank engage in a rule-based monetary policy and abandon its discretionary-based monetary policy?

The Fed’s mandate of achieving low unemployment and low inflation is entrenched in its Federal Reserve Act, Section 2A, 1977 amendment; US Congress, 1977, whereby – “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates”.

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Business , suresh , interest rates , US , monetary policy

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