F. E. Kydland and E. C. Prescott, ‘Rules rather than Discretion: The Inconsistency of Optimal Plans’, Journal of Political Economy, 85, 3, 1977; R. J. Barro and D. B. Gordon, ‘Rules Discretion and Reputation in a Model on Monetary Policy’, Journal of Monetary Economics, 12, 1, 1983.
5  would be quite intuitive if money as a means of payment had immutable characteristics); monetary policy is considered scarcely effective, or even counterproductive as a cyclical stabiliser. Under the pressure of the dramatic events of the early 1970s, economic theory therefore reacted by questioning the paradigms of that time. In 1976, among other things, Friedman was awarded the Nobel prize in economics.