----------------- HES POSTING ----------------- Dear Michael and others, I'm sure Dan Hammond can give you a long list of references. I have only one reference, as a result of the fact that I read this book with some of my students last semester: Friedman, Milton (1982) Capitalism and Freedom. Chicago: University of Chicago Press, p. 50: "Any system which gives so much power and so much discretion to a few men that mistakes -- excusably or not -- can have such far-reaching effects is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic -- this is the key political argument against an 'independent' central bank. But it is a bad system even to those who set security higher than freedom. Mistakes, excusable or not, cannot be avoided in a system which disperses responsibility yet gives a few men great power, and which thereby makes important policy actions highly dependent on accidents of personality. This is the key technical argument against an 'independent' bank." I cringed every time I copied "men," but thought you might still find this reference helpful. It is followed by a dicussion of rules vs. discretion that discusses the law along the lines you suggested (pp. 51-55). --Esther-Mirjam Sent University of Notre Dame ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]