The Design of Simple Rules for the Open Economy

Abstract

It is often argued that macroeconomics is currently in a state of flux. Several schools of macroeconomists have competed in the intellectual arena to provide a suitable policy framework. But the alternative policy packages which have been advocated, either orthodox Keynesian, monetarist or new classical, seem to have been unable to tackle both the unprecedented levels of unemployment recently experienced and the trade imbalances which endangered the stability of the inter-national monetary system.