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I was reading this page about monetarism and I saw a sentence in which the word discretion was used. I'd like to ask if it is correct in terms of semantics.

Characteristics of Monetarism

Monetarism is a mixture of theoretical ideas, philosophical beliefs, and policy prescriptions. Here we list the most important ideas and policy implications and explain them below.

1.The theoretical foundation is the Quantity Theory of Money.

2.The economy is inherently stable. Markets work well when left to themselves. Government intervention can often times destabilize things more than they help. Laissez faire is often the best advice.

3.The Fed should be bound to fixed rules in conducting monetary policy. They should not have discretion in conducting policy because they could make the economy worse off.

4.Fiscal Policy is often bad policy. A small role for government is good. .

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  • It looks fine to me; it's both grammatical and clear in meaning. What made you think it might be wrong?
    – JHCL
    Commented Oct 1, 2015 at 23:25
  • @JHCL I've started to study economics recently, it seems like to me the writer first says the Fed should use fixed rules but then says that the Fed should not have discretion in ...As you know discretion means caution so why would the Fed make the economy worse off if they were cautious and controlling?
    – Mrt
    Commented Oct 1, 2015 at 23:36
  • No - 'discretion' here is in the sense of having freedom and authority; or as Merriam-Webster puts it, the "ability to make responsible decisions", which may or may not be cautious.
    – JHCL
    Commented Oct 2, 2015 at 0:01
  • @JHCL I see it means like control, authority or responsibility.Thank you
    – Mrt
    Commented Oct 2, 2015 at 0:06

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I know where your confusion comes from. The adjective, "discreet" is a synonim of "careful", "alert", and "prudent", etc. as shown in Merriam-Webster and Thesaurus links.

However, if it becomes a noun form, "discretion", not only does it have above meanings in it, but also a meaning of "having freedom to decide what should be done in a particular situation." as the Oxford Dictionary link shows.

The reason discretion is more used in official statements is that it has connotations of "caution" and "carefulness".

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