European central banks policy...any economist here? help

Question

any one know do the European Central Bank uses Rule based policy or discretionary macro-economic policy? rule based means do actions to events with a set of rules. Discretionary means judge the problem before any responds. thanks

Answer 1

ECB uses holds "Rule based policy", it's main priority (rule) - to hold low inflation (though partially they might use judge-type approach). but I would guess that this mix is 75%-Rule and 25%-discretionary..

http://www.ecb.eu/mopo/intro/html/object...

P.S. discreationary sometimes means destabilizing - so it not the right word.

Added: Well, it's not a joke , but I'm not completely sure. It is just my thoughts in this case, so better check-out link and make sure you read their goals and methods (at least few sentences) - part which says "Guiding principles":

http://www.ecb.eu/mopo/intro/operational...

Then make your conclusion..

Answer 2

as the purpose to all central banks is globalization of a single one world monetary system, discretionary policy IS rule based. it is used simply to give the illusion of a free and fair system when the reality is all central banks are strickly controlled through rule. it is how they control governments. the united states owes the american central banking system trillions of dollars. where's the descretion in putting any one "borrower" so deep in debt that paying back the loans are almost impossible? what happens if the government defaults? will the central banks then "own" america by default? maybe the u.s. should consider bankruptcy protection filings!  

Answer 3

How about Monetary Policy?