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2027687 No.2027687 [Reply] [Original]

I'm about to go take an econ final and there is an extra credit question on it:

Should monetary policy be rules based or discretionary?

What say

>> No.2028424

Discretionary

There are many different ways to get to the best outcome and the results are lagging. Markets won't stay the same so rule based doesn't fit everytime.

Just finished my fourth econ class

>> No.2028438

>>2027687
in a perfect world, discretionary. But the world isn't perfect senpai, that's why we have laws instead of all powerful judges who can determine the fair outcome of every problem.

>> No.2028453

>>2027687
Hi frequency trading machines are rules based. If monetary policy were based on something similar it would result in more efficient markets.

>> No.2028470

Also to add to my post..

Extra credit problem the professor is just looking for you to backup your answer with proper reasoning. Either one would work as long as you have a stance and can give reasons for your response. There are laws that govern the decisions, but also these can be changed.