Some Current Proposals Discretionary Monetary Policy

Few topics ineconomics generate more disagreement than the ques-tion of monetary policy. No consensus appears to be emerging as more and more theories and proposals appear. Economists disagree overwhat monetary policy can do and what it should do. Indeed, the debate over monetary policy is often cited by noneconomists as evidence of the confused state of contemporary economics. We suggest a way out of the confusion. We propose letting the market settle the issue of the proper monetary policy. The govern-ment should sell the Federal Reserve System and its power to make monetary policy to the highest bidder. Monetary policy would then be determined through market purchases and sales. Before we explain the details of our proposal, we will discuss some leading current proposals for the conduct of monetary policy