Hoping for Change: Monetary Policy Edition

Platformonomics does not usually do monetary economics (except maybe the virtual kind), but I just happened to be thinking about the Federal Reserve yesterday (admit it, so were you…) shortly before the news broke of Bernanke’s renomination.  I was hoping for a more radical announcement:

Software Bot To Be Nominated Chairman of 
Federal Reserve System

Cutting edge technology tapped to bring stability and
consistency to monetary policy

WASHINGTON D.C. – August 25, 2009 — President Barack Obama today announced he intends to nominate Monet 3.0, a software bot, to become Chairman and a member of the Board of Governors of the Federal Reserve System. As Chairman, Monet will be charged with conducting the nation’s monetary policy by influencing money and credit conditions in the economy.

“Software bots today are successfully outperforming the world’s best human practitioners in complex endeavors like chess, and they do so without irrationality or exuberance,” said President Obama. “Despite the bot’s French-sounding name, I am confident that Monet 3.0’s discipline and transparency will bring price stability and foster the economic growth required for a full economic recovery.”

Monet was born in a lab at Stanford University in the early 1990s and is currently in version 3.0.  The software instantiates a modified version of the Taylor Rule.  Source code for Monet is available for broad inspection and reuse under the modified BSD license at http://bot.federalreserve.gov.

Monet’s nomination requires approval by the Senate and a bout of hyperinflation that makes the Hungarian episode of 1946 look modest.

3 thoughts on “Hoping for Change: Monetary Policy Edition”

  1. How does Monet do in explaining monetary policy to (vapid) members of Congress?Like Treasury Secretary, Fed Chairman’s primary responsibility is message management.

  2. A bot can hardly be more incomprehensible than Alan Greenspan. In this case, a consistent and transparent policy is the message.I also have a plan to upgrade Congress to bots (I briefly considered chimps but didn’t seem like anyone would notice the difference).

  3. I love it!This is a good way to reduce costly human errors and to remove political bias from economic decisions.This might work great in Obamacare too.Joseph Wiezenbaum actually developed the perfect software solution for this called Eliza.Eliza is a software agent that runs a script called DOCTOR which can triage a patients problems across a wide range of conditions, both medical and psychological.The Obama adminstration could reduce healthcare costs by 90% if they use ELIZA as a first level screener for patients.Instead of paying expensive, greedy (and mostly Republican) doctors, we could simply pay the hosting fees for software to someone like Eric Schmidt.Software can also make more informed and more logical decisions without bias.This kind of thing would help people get past their concerns around Democrats on a Death Panel "deciding to pull the plug on Grandma"– ELIZA is software and is NOT affiliated with any party!For an online demonstration, check out: www-ai.ijs.si/…/eliza_script

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