The Advantages and Disadvantages of Rule-Based Monetary Policy

Should the Federal Reserve, a hugely powerful and essentially undemocratic institution, be forced to follow stricter rules in setting its monetary policy? Congressional Republicans believe so. In July, they proposed the Federal Reserve Accountability and Transparency Act, a bill that would require the Fed to formulate and publicize a rule for making interest rate decisions. If the Fed deviates from the rule, it would have to testify before a relevant Congressional committee as to why. Republican...