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In old Chicago: Simons, Friedman and the development of monetary-policy rules

  • George S. Tavlas

    ()

    (Bank of Greece)

This paper examines the different policy rules proposed by Henry Simons, who, beginning in the mid-1930s, advocated a price-level stabilization rule, and by Milton Friedman, who, beginning in the late-1950s, advocated a rule that targeted a constant growth rate of the money supply. Although both rules shared the objective of eliminating the policy uncertainty emanating from discretion, they differed because of the different views of Simons and Friedman about the stability of secular relationships. Simons' rule relates to modern rules which emphasize the pursuit of price stability as representing optimal monetary policy.

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Paper provided by Bank of Greece in its series Working Papers with number 177.

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Length: 35
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:bog:wpaper:177
Contact details of provider: Web page: http://www.bankofgreece.gr

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  23. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
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