Simple Policy Rules for the Open Economy: Evaluating Alternative Proposals
The design of macroeconomic stabilisation policies has undergone thorough revision over the last few years. After the collapse of monetarism as a philosophy of economic policymaking, many scholars have suggested the abandonment of open-loop rules in favour of more interventionist policies. However, an important legacy of monetarism is the emphasis on the need for rules that stabilise the economy because they are known to the private sector and perceived as credible.
KeywordsExchange Rate Monetary Policy Current Account Fiscal Policy Real Exchange Rate
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