Conclusion
Certainly these last comments lead to the question what should be targeted: the growth rate [as for example in Gordon’s 1985 work] or the level as in Hall [1983] or McCallum [1988] or no targeting at all [like in Friedman 1960; 1968; 1985] or Meltzer [1984; 1987]. Since targeting GNP growth rates might lead to instability and overshooting effects as Taylor [1985] points out, altering rule (1) in that way is not appropriate. But targeting on the levels may not reduce fluctuations in growth rates or prevent cycles at all. If the latter are, however, more important in public opinion, a policy problem emerges. To summarize the last comment in a figurative way: McCallum’s rule prevents inflation in the long run and may prevent fluctuations in terms of half a Kondratieff cycle, but it preserves and intensifies Juglar and shorter cycles.
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Loef, H.E. The case for rules in the conduct of monetary policy: A critique on a paper by B.T. McCallum. Weltwirtschaftliches Archiv 125, 168–178 (1989). https://doi.org/10.1007/BF02707527
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DOI: https://doi.org/10.1007/BF02707527