7. We have only scratched the surface of policy rules. You can learn much more by searching the Internet.
a. A policy rule that economists talk a great deal about is the "Taylor Rule." Search the internet for this term and explain what the Taylor Rule is.
b. A somewhat different policy rule that often appears in discussions of monetary policy is called "inflation targeting." What is it? What central banks use it and why? Why do many countries not use it?
c. The reading mentioned the gold standard as a policy rule. Barry Eichengreen is an economist who has argued that adherence to the gold standard and gold-standard thinking was the primary cause of the Great Depression. Search the internet for "gold standard" Eichengreen and see what you can learn about his position.
d. A number of economists have argued that Federal Reserve policy during the Great Depression was guided by the "real-bills doctrine" which is sometimes called the "commercial-loan theory of banking." Search for these terms. What was this theory or doctrine? How could it have led to bad monetary policy?
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