Should-Read: Nick Bunker: What would rules-based monetary policy look like?: "All of this isn’t to say that the reaction functions of central banks or individual central bankers aren’t important... http://equitablegrowth.org/equitablog/value-added/what-would-rules-based-monetary-policy-look-like/
...Understanding how central bankers view the workings of the economy and how they balance inflation and unemployment are important for not only communicating policy, but for accountability as well. If the benefits of a Taylor Rule or similar rules come from creating consistency or predictability in how central bankers react, then the benefits of an inflation or output growth target come from creating predictability in those economic variables.
A mandate from elected officials to target inflation, for example, is creating a rule for the central bank. But this rule is about the target or goal of monetary policy and gives some discretion to the central bank about how to meet that goal. Predictability is the goal, but at a different level. Politicians setting a target for the Federal Reserve and then giving it some room to maneuver is also a form of rules-based monetary policy—there’s just a difference in what is being governed by the rule...
