The Fed on Autopilot. Some economists believe that the Federal Reserve should follow strict rules for the conduct of monetary policy. These rules would require the Fed to make adjustments to interest...

The Fed on Autopilot. Some economists believe that the Federal Reserve should follow strict rules for the conduct of monetary policy. These rules would require the Fed to make adjustments to interest rates based on information that is fully available to the public, information such as the current unemployment rate and the current inflation rate. Essentially, they would put the Fed on autopilot and remove its discretion. What are the pros and cons of such an approach? Would it work in a financial crisis? (Related to Application 2 on page 385.)