00:01
Looking at the possibility of implementing policy rules, there are certainly arguments on both sides of it.
00:05
So those arguments which would be for policy rules, the first of which has to do with the time and consistency problem.
00:11
And the possibility of these policy rules being able to essentially solve this time and consistency problem, mainly by holding these policymakers accountable for those actions that they say that they're going to take.
00:23
Another possibility here is, or another argument for policy rules would be that they could prevent previous mistakes from occurring.
00:30
So if we look historically at any sort of previous policy mistakes or economic mistakes that have taken place, well, these policy rules could prevent those from happening.
00:39
So we would negate the issue of previous mistakes happening once again.
00:43
Another argument for the policy rules would be if we take a look at political business cycles, so in the sense that business cycles occur because of different policies, both before and after an election.
00:55
So if there are conflicting policies as it pertains to business, say particularly a contraction, policy beforehand, and then after the election takes place, we're dealing with expansionary policy.
01:05
So all of a sudden, we're having these business cycles occur because of politics, not because of the economy itself...