Macesich argues that the poor performance of monetary policy can be attributed to the ease with which "money" slips into the political arena. Discretionary authority facilitates monetary manipulation for political ends, thereby increasing uncertainty and casting doubt on money, the monetary system, and indeed the monetary authority itself. The author traces the evolution of the debate over rules versus discretionary authority and discusses various methods that economists have proposed for constraining the monetary authority. He concludes that if monetary policy is to be credible and thus successful, the hands of monetary policy makers are better tied than left free.
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