Policy rules are better than discretionary policies. Justify the above statement in light of new classical macroeconomics.

The new classical macroeconomics, also known as real business cycle theory, is a macroeconomic theory that emphasizes the role of market forces in determining the economy's output and prices. According to this theory, policy rules are better than discretionary policies because they allow the market to function more efficiently and reduce the risk of policy-induced economic instability.

One of the main arguments for policy rules is that they provide a clear and predictable policy environment for individuals and firms, which helps them make better decisions. For example, if individuals know that monetary policy will always aim to keep inflation at a certain target, they can make investment decisions with more confidence, knowing that the policy environment will not change suddenly. This can lead to a more stable and efficient economy, with lower rates of inflation and unemployment.

Discretionary policies, on the other hand, are those that are determined by the policymaker based on the current state of the economy. While these policies may be effective in the ___ __________ ____ ______ ____ _______.
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