Just a thought in response to this otherwise good Lars Christensen post.
There was a time when "discretionary" was the word we used to describe counter-cyclical policy. But I think after John Taylor that old distinction became a lot harder to justify. Rules is rules. Then with Lars Svensson's work on forecast targeting people started to realize that even old-school, non-counter-cyclical rules started to look a lot like the stuff they used to call discretionary. Nowadays it seems like "discretionary" is also used to talk about any unconventional mechanism even if it's used for the purposes of a very conventional policy rule.
So I don't personally see much value in the rules/discretion distinction except as a nice way to distinguish yourself from you opponents.
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I drop a comment whenever I appreciate a post on a website or I have something to valuable
ReplyDeleteto contribute to the discussion. It is a result
of the passion communicated in the article I looked
at. And on this post "I've come around to the view that "discretionary" is just a word people use to describe policy rules that they don't like".
I was moved enough to drop a thought :-P
I actually do have a couple of questions for you
if you usually do not mind. Could it be simply me or does
it appear like some of these responses look as if they are
coming from brain dead folks? :-P And, if you are posting at other places,
I'd like to follow everything fresh you have to post. Would you make a list the complete urls of all your social pages like your twitter feed, Facebook page or linkedin profile?
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