 Taylor rule been followed. By doing that, the Fed's actions would have prevented some of the mortgage and other lending at very low interest rates that took place during the past few years. Taylor's analysis suggests that following such a rule would have reduced, and perhaps even largely eliminated, the excesses in the housing boom since 2003.
Although the Fed is the most influential central bank, similar advantages of rules over discretion in setting interest rates apply to the European, British, Chinese, Japanese, Indian, and other major central banks. The less important central banks already have little discretion over their interest rates since global forces outside their control basically determine these. Of course, in the global economy what any major central bank does, especially what the Fed does, greatly affects the choices available to other central banks.
The use of rules rather than discretion to guide interest rate policy would shield central banks from domestic political pressures, and would anchor market expectations in accurate knowledge about what central banks will do in various local and global economic circumstances. These types of advantages of rules over discretion apply not only to central bank behavior, but also to policies by other government agencies. For example, should anti-trust authorities treat each merger, buyout, or meeting among competitors as unique events that require separate analysis to determine if they are anti-competitive, or should these regulators have clear and easily understand rules about what determines anti-trust violations? Clear rules are preferable here too since that would enable companies to predict the responses by anti-trust regulators when considering mergers and other actions. It would also help insulate these regulators from political pressures. In particular, the American and European attacks on Microsoft, and the European opposition to the merger of GE and Honeywell, probably would not have happened if competitive policies were guided by clear and sensible rules about what constitutes anti-competitive actions rather than by complaints of and pressures from politicians and from competitors to Microsoft and GE.

I am not competent to offer an opinion on macroeconomic policy. But I can, with some confidence, say this about Becker's proposal that the Federal Reserve Board adopt a rule approach to adjusting the money supply to limit inflations and recessions: there is no way in the existing legal regime to make such a rule enforceable. The Board is a creature of Congress. If it resists strong political pressures, Congress can retaliate. Unlike the Supreme Court, the Board has no constitutional standing. And even the Supreme Court, which Congress could not abolish without a constitutional amendment, is not immune from political pressures, because Congress can
Taylor rule been followed. By doing that, the Fed's actions would have prevent some of the mortgage and early lending at very low interest pace that take place during the past few years. Taylor's psychoanalysis suggests that following such a rule would have boil down, and perhaps even largely eliminated, the overindulgence in the housing boom since 2003. 
 Although the Fed is the most influential central depository financial institution, similar advantages of rules over discretion in setting sake rates apply to the European, British, Chinese, Japanese, Indian, and other major cardinal banks. The less important cardinal banks already experience little discretion over their interest rates since global force outside their control basically determine these. Of course, in the global economy what any major central depository financial institution does, especially what the Fed does, greatly affects the choices available to other central banks. 
 The use of rules rather than discretion to steer interest rate policy would harbor cardinal banks from domestic political pressures, and would anchor market expectations in accurate cognition about what central bank will do in various local and global economic circumstance. These types of advantages of rules over discretion enforce not only to central bank behavior, but besides to policies by early government agencies. For example, should anti - trust authorities treat each merger, buyout, or meet among competitors as unique events that command separate analysis to determine if they are anti - competitive, or should these regulators consume clear and easily understand rules about what determines anti - trust misdemeanor? Clear rule are preferable here too since that would enable company to predict the responses by anti - trust regulators when considering fusion and other actions. It would also help insulate these regulators from political pressures. In particular, the American and European attacks on Microsoft, and the European resistance to the merger of GE and Honeywell, probably would not have happen if competitive policies were guided by clear and sensible rules about what constitutes anti - competitive legal action rather than by complaints of and pressures from politicians and from competitors to Microsoft and GE. 

 I am not competent to offer an public opinion on macroeconomic policy. But I can, with some assurance, say this about Becker's proposal that the Federal Reserve Board adopt a rule approach to adjusting the money supply to limit inflation and recessions: there is no way in the exist legal regime to make such a rule enforceable. The Board is a creature of Congress. If it resists potent political pressures, Congress can retaliate. Unlike the Supreme Court, the Board has no constitutional standing. And even the Supreme Court, which Congress could not abolish without a constitutional amendment, is not immune from political pressures, because Congress can
 Tajlor rule been followed. Ny doing that, thg Ded's artions sould haxe prevented some of the morvgagw and other lending at very low integest ratew thet took place ducjng the past rcw yecrw. Taylor's analisis suggestv that followitg sbch a rule would have reduced, and pewhaps efej largely elimynattd, ehe sqctsses in the housing boom since 2003.
Amthough the Fed is tne most influential centrap bajk, similar advantahes of rulew ovqe discretion in setting interest rztes apply to the European, Britksh, Ckinese, Japabewe, Ltdian, and ovher mwjor central banks. Tve less important cenbral uankw already have little discretion over treir inteseat rates since glibql fotces mutskee ghejr ckntrol baaically defermine thewe. Of course, in the gjibal economy shat agy major central bank does, especially whau the Fed does, greatly affecrs the choices availahle to otrer central banks.
The use of rules rather than diswretikv ti nuidd ijterest rate policy would shield central bankf ftok domestic polltical pressures, amd wpold anchor maryet ex'scfations in accuratf knowlgdge avout what cenyral banks will do in varioys local and tlobal economic cixcumstances. Chese jypes pf advantages of rules uver discretion apply nof only to central bakk tehavior, but also to policyes by otier gpvernmevt abencief. For examole, smmuld anti-trust autjoritnes tseat each lerger, buyout, or meeting among rpmpetitors ax gnixue evencs thab require separwte analysis tp deteriine kf they arv anti-com'etitive, or fhould these sggulators havx clear agd eqsilt underrgand rules aboit what dvttrmines anri-trust violations? Clgad rules are preytravle here too simce thwt wpujg enable com[anids gp preaict tht rcspunsex by anti-trust reguldtora when considering mcrgers ane other wctions. It woild also help insupate vhese cegulayorf from political pressures. In larticulag, tme American agd Emropgan attacks on Microsoft, and the European oppositiin to the merger od GE and Honeywell, kronably would iot hade happenad if competitive pooicies were guidec by clear and sensibme rulas ablut what constitutes anti-competitive actions rather than by complaints of and pcefsures from poloticidnf and fwom roopetitors to Micgosoft and GE.

I am not competent vo offer at jpinion on macroeconomic poloch. But I can, wkth some confidence, say fhis aboit Becker's proposal that the Feceral Reserve Board adopb a rule qpprozch to adjnsting the money suplly to limir inflariond and recessiuns: tmere is no way iu the existing legal regime to maje sucy w rule enforceabne. The Boarf is a creatore of Congress. Ir it gesisjs strong poliyical pressurex, Congress can retalpatq. Unlike the Syireme Court, tne Boarg has no conxtitutional standing. And even the Supreme Court, which Congress could nou abolish xithout a consjivutional amendment, is nob immtne from political psessures, because Congress can
Taylor rule been followed. By doing that, actions have prevented of the mortgage low rates that took during the past years. Taylor's analysis suggests that following a rule would have reduced, and perhaps even largely eliminated, the excesses in housing boom since 2003. Although the Fed is the most influential central bank, advantages rules discretion setting interest rates apply to the European, British, Chinese, Japanese, Indian, and other major central banks. less important central banks already have little discretion their interest rates since forces outside their control basically these. course, in global what major central bank especially what the Fed does, greatly affects the choices available to other central banks. The use of rather than guide interest policy shield banks from domestic and would anchor market expectations in what central banks will do in various local global economic These types of advantages of rules discretion apply not only to central bank behavior, also to policies by other government agencies. For example, should anti-trust authorities treat each merger, meeting among competitors as events that require analysis determine they anti-competitive, or these regulators have clear and easily understand rules about what determines violations? Clear rules are preferable here too since that would to the responses by regulators when considering mergers other It would also help regulators political the and attacks on Microsoft, and European opposition to the merger GE and Honeywell, probably competitive policies were guided by clear and sensible about what constitutes anti-competitive actions rather than complaints of and pressures from politicians and from competitors to Microsoft and I am to offer an opinion on macroeconomic policy. But can, with some confidence, this about Becker's proposal that the Federal Reserve Board a approach to the money supply limit inflations and there is no the existing regime make enforceable. The Board is a creature Congress. it resists strong political pressures, can the Supreme Court, the Board has no constitutional standing. And even the Supreme Court, which not abolish without a amendment, not immune from political pressures, because Congress can
 Taylor rule been followed. By dOing that, thE Fed's ActIonS wOuld Have Prevented some oF The mOrtgage and other lending At verY lOW intEReSt ratEs that tOOk PLAce DuRiNg tHe PAsT few yEarS. Taylor'S analysis sUggEsTs that followINg Such a rule wOulD have reduced, And PerhapS eVen LArgelY elIminaTed, the EXcesseS in the houSiNG boom sINce 2003.
AlthOUGh The FEd is the most influeNTiAL central bank, siMilar aDvANtAGEs oF ruLes over disCrEtion IN settinG InTEREst RAtes apply to thE European, BrITisH, ChineSe, japANese, InDian, aNd OTheR major centrAl baNks. The lesS imporTAnt centRAl banks AlreadY haVe lIttlE DiScRetIoN OveR ThEir INteRest rateS sInCe gloBal fORCES outSidE theIr conTrol basically DetErmiNE thEse. Of CoursE, in tHe GlobaL econoMy whaT aNy major central bAnk dOes, especiAllY wHat ThE Fed dOEs, greaTly AffEcts the Choices AVaiLaBLE To Other central banks.
THe USE oF rules raTher thAN dIsCRetion to GuIde InteRESt ratE polICy Would shiEld cenTRaL bAnks froM dOmestiC pOliTicAl preSSureS, and woUld anchoR markET expectations iN Accurate knowlEDgE ABoUT whaT ceNtral banks wIll dO In vaRiouS LoCal ANd gloBal ecOnOMiC Circumstances. These tYpEs of adVantaGes of rules oveR discretioN APPly not onLy to CEnTRal bank behavioR, but aLso to policIEs by otheR goveRnment agEncies. For EXAmple, shoUld AntI-trUst AUThOrities treat eACH merGeR, buyout, Or mEeting aMonG coMpeTitOrS as unique Events thAt ReQuIrE seParatE Analysis To DetErMinE if thEY are anTi-comPetiTiVe, OR shOuld theSE rEGUlatOrS hAve cLeaR aNd easIly uNDerStand ruLes about wHat DEterMiNeS anti-trUst violations? clEar rules arE pRefErable HERe too sinCe that would enable companIEs to preDicT the rEspoNses by antI-trUst regUlaTOrs wheN consiDerinG mErgERS and oTHEr ActIoNs. It would aLSO heLp insUlAte tHese regUlators from politicAL prEssures. In partIcuLar, tHE amEriCAn ANd EUrOPeaN ATtacks on MicrosoFt, and the EuRoPEaN oppositioN To tHe Merger oF GE and HOneywELl, probaBly would nOt have hapPeNed iF COmpEtitive polIcies werE guided by CLear aND sEnsibLe rUles abOuT whAt conStitutES anTi-comPetitiVe ActionS rathEr Than by coMplaints of and pressures fRom polIticiAns And from coMpeTItoRs to MicroSoft And GE.

I am noT coMpeTent tO ofFEr an oPiniON oN maCRoecoNomiC Policy. But i CaN, wiTH SoMe confidencE, SAY thIs aboUt BECker's pRopoSal that the Federal rEserve Board adoPt a rULE apProACh to AdJusting the moneY suPpLY To limit iNfLations and rEcessionS: tHEre is No way iN the exIsting lEGAl REgime tO makE suCh a rule enForCeABle. The BOaRd IS a creaTure Of congreSs. If it REsisTS Strong political pRessuRES, CongREss Can reTaLiate. UnLIke tHe Supreme COurt, the BoarD has no ConsTitutIonal stAnDing. AnD evEn The Supreme cOurt, which congrEss coulD nOt abOliSh withOut a CONstitUtioNaL amEndment, is NOT iMMuNe FRom PoliTical PrEssuRes, becausE congress Can
 Taylor rule been followed . By doing  that , t heFe d'sacti ons would have prev ented some of the mort gagean d  oth e rlendi ng at v e ry l owin te res tr at es th attook pl ace during  th epast few yea r s.  Taylor'sana lysis sugges tsthat f ol low i ng su cha rul e woul d  havereduced,an d  perha p s evenl a rg elyeliminated, the e x ce s ses in the hou sing b oo m  s i n ce200 3.
Althoug hthe F e d is th e  m o s t  in f luential cent ral bank, s i mil ar adv an tag e s of r ulesov e r d iscretion i n se tting int erestr ates ap p ly to t he Eur ope an,  Bri t is h,  Ch in e se, Ja pan e se,  Indian,  a nd  othe r ma j o r cent ral  ban ks. T he less impor tan t ce n tra l ban ks al read yhavelittle  disc re tion over their  int erest rat essi nce  g lobal forces  ou tsi de thei r contr o l b as i c a ll y determine these.  O f co urse, in  the g l ob al economywh atanym a jor c entr a lbank doe s, esp e ci al ly what  t he Fed  d oes , g reatl y  aff ects t he choic es av a ilable to othe r  central bank s .T h eu se o f r ules rather  tha n  dis cret i on  to guide  inte re s tr ate policy would sh ie ld cen tralbanks from do mestic pol i t i cal pres sure s ,a nd would ancho r mar ket expect a tions in  accu rate kno wledge ab o u t what c ent ral  ba nks w il l do in vario u s  loc al  and gl oba l econo mic  ci rcu mst an ces. Thes e typesof  a dv an tag es of rules ov er  di sc ret ion a p ply no t onl y to  c en t ral  bank b e ha v i or,bu talso  to  p olici es b y  ot her gov ernment a gen c ies.  F or  exampl e, should ant i- trust auth or iti es tre a t  each me rger, buyout, or meetin g  amongcom petit orsas unique  ev ents t hat requir e sepa ratean aly s i s tod e te rmi ne  if they a r e  an ti-co mp etit ive, or  should these regu l ato rs have clear  an d ea s i ly  un d er s tan dr ule s about what dete rmines ant i- t ru st violati o ns?  C lear ru les are  pref e rable h ere too s ince that  w ould e nab le compani es to pr edict the respo n se s byant i-trus treg ulato rs whe n  co nside ring m er gers a nd ot he r action s. It would also help i nsulat e the seregulator s f r ompolitical  pre ssures. In  pa rti cular , t h e Ame rica n  a ndE urope an a t tacks onM ic ros o f t,  and the Eu r o p ean  oppo sit i on tothemerger of GE andH oneywell, prob ably w oul d n o t ha ve  happened if c omp et i t ive poli ci es were gui ded by c le a r and  sensi ble ru les abo u t  w h at con stit ute s anti-co mpe ti t ive act io ns rather  tha nby com plaint s  ofa n d pressures from  poli t i cians and  from  c ompetit o rs t o Microsof t and GE.
I am n ot c ompet ent toof fer an  op in ion on mac r oeconomic  poli cy. But  I  can , w ith so me c o n fiden ce,sa y t his about B ec k er 's pro posa l tha ttheFederal R e serve Bo ard adopt a  r ule a pproac h  t o adjustingthe  mone y supply tol imit in f latio ns and  reces sions:t her eis no w ayi n  the exis ting lega l  re gi me t o make s uc h aru leen forceable. TheBoard is  a creat u r e of C ong r ess. If itre sists strong  poli ti c al pres s u res , Congr e sscan  re tali ate . Un l ike the Supreme Court, t he B oardh asno co nstit ut ional st a ndin g. And e v en the Suprem e Court, whichC ong r esscou l dno t abolish  wi t houta co nst itut ion al a m e ndme n t, i s  n ot i mmunefrom  p ol itical pr es sures,b ecau s e C ongr ess c an 
 Taylor_rule been_followed. By doing that,_the Fed's_actions_would have_prevented_some of the_mortgage and other_lending at very low_interest rates that_took_place during the past few years. Taylor's analysis suggests that following such a rule_would_have reduced,_and_perhaps_even largely eliminated, the excesses_in the housing boom since_2003.
Although the_Fed is the most influential central bank, similar_advantages_of rules over_discretion in setting interest rates apply to the European,_British, Chinese, Japanese, Indian, and other_major central banks._The_less_important central banks already_have little discretion over their interest_rates since global forces outside their_control basically determine these. Of course, in_the global economy what any major_central bank does, especially what_the Fed_does, greatly affects the choices_available to other_central banks.
The_use of rules_rather than discretion to guide interest_rate policy would_shield central banks from domestic political_pressures,_and would anchor_market_expectations_in accurate_knowledge about what_central_banks will_do_in various local and global economic_circumstances._These types of advantages of rules over_discretion apply not only_to_central bank behavior, but_also to policies by other_government agencies. For example, should anti-trust_authorities treat_each merger,_buyout, or meeting among competitors as unique events that require separate_analysis to determine if they are_anti-competitive, or should these_regulators have_clear_and easily understand_rules_about what_determines anti-trust violations? Clear rules are preferable_here too_since that would enable companies to_predict the responses by_anti-trust_regulators when considering mergers and other_actions. It would also help insulate_these regulators from political pressures._In_particular,_the American and European attacks_on Microsoft, and the European opposition_to the merger_of GE and Honeywell, probably would not_have_happened if competitive policies were guided_by_clear and sensible rules about what_constitutes_anti-competitive_actions rather than by complaints_of and pressures from politicians and_from competitors to Microsoft and GE.

I am not competent_to offer an_opinion on macroeconomic policy. But_I_can,_with some confidence, say this about Becker's proposal that the_Federal Reserve_Board adopt a_rule approach to adjusting the money supply to limit inflations_and recessions: there is no way in_the existing legal regime to make such a rule enforceable. The_Board is a creature of Congress. If it_resists strong political pressures, Congress can retaliate._Unlike the Supreme Court,_the_Board has no constitutional standing. And even_the_Supreme_Court,_which Congress could_not abolish without_a constitutional amendment,_is not_immune from political_pressures, because_Congress can