Philosophy Dictionary of ArgumentsHome
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| The McCallum rule: The McCallum rule, proposed by economist Bennett McCallum, suggests setting monetary policy based on both the money supply growth rate and the output gap. It proposes adjusting the growth rate of the money supply according to the difference between actual and potential output, aiming to stabilize both inflation and economic output simultaneously. See also Monetary policy, Money supply, Economic growth, Inflation._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Bennett McCallum on McCallum Rule - Dictionary of Arguments
Mause I 232f McCallum Rule/McCallum: McCallum proposes (1) to facilitate monetarist monetary policy by investing money supply control more indirectly than in the case of the Taylor Rule (see Taylor Rule/Taylor). The central bank is to align the monetary base with the longer-term development path of the nominal domestic product. McCallumVsTaylor: the direct control of money supply by the Taylor rule means that monetary policy makers must make explicit statements about the price and volume components. Solution/McCallum: The very long-term orientation (more than 20 years) also ensures that the development path is independent of monetary development. (2) The averages are calculated over a rolling period of 4 years to prevent the monetary base from reacting to cyclical fluctuations in circulation speed. In contrast to the original Taylor Rule, the McCallum Rule is based exclusively on data from the previous period or on long-term average values. The problem of real-time data in identifying the need for adaptation therefore does not occur. VsMcCallum: this volume-oriented concept consciously accepts greater interest rate fluctuations. 1. McCallum, Bennett T., The case for rules in the conduct of monetary policy: A concrete example. Review of World Economics 123, (3), 1987, S. 415– 429. 2. Ibid._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconMcCall I Bennett McCallum The case for rules in the conduct of monetary policy: A concrete example 1987 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
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> Counter arguments against McCallum
> Counter arguments in relation to McCallum Rule
Ed. Martin Schulz, access date 2024-04-28