Waiting for Policy Rules
Should central bankers be free to decide what policy actions they will take and when they will take them, or should they agree to an explicit policy rule and stick to it? The discretion versus-rules debate is an old one, but unfortunately, it has rarely addressed the fact that the benefits of moving from one regime to the other depend on the timing of the move. This Economic Commentary explores the value of waiting to adopt rules and the way it is affected by uncertainty.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit clevelandfed.org for updates.
This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International
- Share