Policy Rules as a Means to a More Effective Monetary Policy

The purpose of the Seventh Bank of Japan International Conference is to discuss ways in which monetary policy can be made more effective. There are many routes to a more effective monetary policy — through more accurate measurement of inflation, greater knowledge of the monetary transmission mechanism, better ways to supervise banks and other financial institutions, and so on. But the most basic route of all, in my view, is through the development of a set of monetary policy rules or guidelines to help guide monetary policy decisions.