Acta Universitatis Danubius. Œconomica, Vol 11, No 2 (2015)

Abstract

In this article, basing on offensive lecturing research articles of famous authors on financial instability and monetary policy, we propose as aim of this paper to discuss the controversial rule vs. discretion in monetary policy and the new institutional framework of inflation targeting as a remedy for inflationary pressures after the cause of the intermediate target of monetary anchors and exchange rate policy, since the year 70's of the last Century. To do this, we treated a literature review in the field, assigning the work of various economists thus handling of monetary policy favors the discretion/rule to the new inflation target strategy in 90's and  2000. We put particular emphasis on the second step of this paper on the possibility of inflation targeting as an anti-inflationary objective defended for its main defendants.

Keywords: monetary policy, rule, discretion, financial instability, inflation targeting.

JEL Classification: E42, E43, E52, E58.