Do not make the mistake of thinking that because my conclusion is the same as another person's that my reasoning is the same
Greenspan is correct to this degree: economic theory doesn't have the predictive power to allow the creation of a set of rules for the Fed.
JACKSON HOLE, Wyo., Aug. 29 ? Fending off critics who say the nation's monetary policy has become too personalized and idiosyncratic, Alan Greenspan, the chairman of the Federal Reserve, stepped up his insistence today that the Fed should continue to have broad discretion and not be hemmed in by formal rules or even by long-established traditions.
"Some critics have argued that such an approach to policy is too undisciplined, judgmental, seemingly discretionary and difficult to explain," Mr. Greenspan told a symposium here attended by Fed officials and monetary policy experts from around the world.
"The Federal Reserve should, some conclude, attempt to be more formal in its operations by tying its actions solely to the prescriptions of a formal policy rule," he continued. "That any approach along these lines would lead to an improvement in economic performance, however, is highly doubtful."