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March/April 1999, 
Vol. 81, No. 2
Posted 1999-03-01

Monetary Policy Rules

by William Poole

A monetary policy rule is nothing more than a systematic decision-making process that uses information in a consistent and predictable way. In this article, Federal Reserve Bank of St. Louis President, William Poole, critically examines past instances when policy failed to deliver price stability. He also describes the rule-like behavior embodied in successful monetary policy episodes. Poole suggests that developing, implementing, and refining a monetary policy rule is the best way to ensure that the current low inflation environment continues into the next millennium.