The monetary policy rule that is in the spirit of the quantity theory of money and focuses on the goal of price stability is the

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The McCallum Rule is a monetary policy rule that is consistent with the quantity theory of money and focuses on the goal of price stability. This rule suggests that the central bank should adjust the nominal interest rate in response to changes in the growth rate of nominal income or GDP. This adjustment should be such that the growth rate of the nominal interest rate is equal to the sum of the target inflation rate and the growth rate of real GDP. This rule is named after its creator Bennett McCallum, a prominent economist who has done extensive work on monetary policy rules.

The Monetary Policy Rule That Is in the Spirit of the Quantity