Rule-Based Monetary Policy

Rule-Based Monetary Policy

A monetary policy in which a jurisdiction rarely or never deviates from established norms. A rule-based monetary policy does not make exceptions based upon extenuating circumstances.
References in periodicals archive ?
In case of rule-based monetary policy, the Central Bank plays an active role to offset adverse shocks and stabilise the economy.
Instead, Taylor advocates rule-based monetary policy, control of federal debt, and scaling back entitlement programs.
Over the last decades, a shift from discretionary policy to rule-based monetary policy has been evident.
He favors a rule-based monetary policy to stabilize the growth of nominal income and achieve long-run price stability.
Under this regime, and under the subsequent flexible inflation targeting policy, the Bank has maintained a credible commitment to price stability by adopting a consistent rule-based monetary policy, supported by a high level of transparency in forecasting and the operation of policy.