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Rules, Discretion and the United Kingdom's New Monetary Framework

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  • Andrew G Haldane

Abstract

This paper aims to juxtapose the theoretical and empirical literature on policy rules and targeting procedures alongside the United Kingdom's new monetary framework. For example, how does inflation targeting, as practised in the United Kingdom, compare with the optimal feedback rule for monetary policy? Or, conversely, how does it compare with Friedmans k% rule? Is an inflation target akin to an optimal central bank contract - an analogy drawn by Walsh (1995)? Or is it better characterised as giving rise to a (second-best) inflation-averse central bank - such as Rogoffs celebrated conservative central banker?`

Suggested Citation

  • Andrew G Haldane, 1995. "Rules, Discretion and the United Kingdom's New Monetary Framework," Bank of England working papers 40, Bank of England.
    • Handle: RePEc:boe:boeewp:40
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    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1995/wp40.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wieland, Volker & Wolters, Maik, 2013. "Forecasting and Policy Making," Handbook of Economic Forecasting, in: G. Elliott & C. Granger & A. Timmermann (ed.), Handbook of Economic Forecasting, edition 1, volume 2, chapter 0, pages 239-325, Elsevier.
    2. Falcetti, Elisabetta & Missale, Alessandro, 2002. "Public debt indexation and denomination with an independent central bank," European Economic Review, Elsevier, vol. 46(10), pages 1825-1850, December.
    3. Csermely, Ágnes, 1997. "Az inflációs célkitűzés rendszere [Inflation targeting]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 233-253.

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