What sort of driving policy do you have?  Are you a fast driver or a slow driver?  And how should we evaluate a person’s driving policy?

Suppose I’m driving my Ferrari up a long mountain road outside of Denver.  I overtake and fly by a slow moving 1968 VW minivan, which is chugging up the hill at 55 mph.   I say to my passenger, “What a slow driver!”  The passenger might respond by denying that I had passed a slow driver:

“Drivers should be judged based on intentions, not outcomes. Perhaps the minivan driver had depressed the gas pedal 80% of the way to the floor, while in this Ferrari the pedal is only depressed 50% of the way to the floor.  In that case, the minivan driver had a faster speed policy, despite the slower outcome.”

That seems an odd way to describe a speed policy.  But my passenger insists that the term “policy” implies actual intentions, not outcomes, and depressing the gas pedal by more or less is the specific action that causes the car to change speeds.  So speed policy should be judged based on the specific actions taken by the driver.

I respond that depressing the gas pedal 80% of the way to the floor means something very different when going up a hill as compared to taking the same “concrete step” when going down a hill.  It makes no sense to describe someone choosing to go 55 mph on an expressway as having a “fast speed policy.”

One potential compromise would be to define an equilibrium rate of pedal depression.  That’s the gas pedal setting that yields the appropriate speed—say 70 mph.  Using this criterion, depressing the gas pedal by more than equilibrium leads to a high speed policy, and depressing the gas pedal by less than equilibrium leads to a low speed policy.

I guess that would work, but how do you know the equilibrium rate of pedal depression?  Don’t you have to look at the speedometer to determine whether the gas pedal has been depressed too much or too little?  I’m not saying this pedal approach is impossible—maybe a computer could be programmed to take everything in account and estimate the pedal depression required to reach 70 mph, but isn’t it just easier to look at the speedometer?

In the comment section, please tell me if you would view a Ferrari and minivan as having the same speed policy if both drivers depressed the pedal by 50%, or would you regard these cars as having the same speed policy if both vehicles were going 70 mph?

Also, do you see any similarities between the question of ascertaining the speed policy of a driver, and ascertaining the monetary policy of a central bank?  What is the analogy for pedal depression?  What is the analogy for speedometer reading?  What would the optimal speedometer look like if speed responds with a lag to pedal depression?

PS.  Suppose a driver already going downhill depressed the gas pedal all the way to the floor.  The car ended up going so fast that an accident resulted.  Would it be a valid excuse to say, “The steep hill caused the accident”?  How does this analogy apply to fiscal and monetary policy during 2021?

PPS.  My actual car is not a Ferrari, it’s a Nissan Maxima.  (Still faster than a minivan):