The Grumpy Economist: Taylor's "First Principles": "If people are forward-looking, and adjust their behavior to new circumstances, then economic policy works best when formulated as a rule. Government's adherence to known rules allows people to have a better sense of what is coming, and therefore to make more-informed decisions about long-range plans. (p. 23)
John continues,
Setting out a sensible rule and sticking to it also helps policymakers resist interest-group pressure. Rather than having to consider the merits of every special-interest plea for more government support, a rule can set a standard that applies to all cases and limits the role of government broadly. "
'via Blog this'
No comments:
Post a Comment