WEAPON IN THE ANTI-KRUGMAN WARS —“The real difference between Chicago and MIT

http://greeneconomics.blogspot.com/2015/07/dr-krugmans-discussion-of-mit-vs.htmlELEGANT WEAPON IN THE ANTI-KRUGMAN WARS

—“The real difference between Chicago and MIT macro is Chicago’s commitment to rules over discretion. Milton Friedman’s endorsement of a constant 3% increase in the money supply was meant to minimize the chance of hyperinflation and to make running the Fed a boring job such that investors had clear expectations of how Policy would be set. When “leaders” have discretion with respect to how they set policy, they have more fun on the job but “uncertainty” increases and this reduces investment.”—Matthew Kahn

In other words, the Chicago program seeks to define rules that will eliminate discretion. The MIT program seeks to identify opportunities for discretion. Rule of law = Lack of Discretion.

I wasn’t able to come up with that myself. And it’s wonderful.