Monetary targets have come to be regarded as inadequate for the conduct of short-term monetary policy, both among theoreticians and practitioners of policy. In this paper two approaches are put forward, analysed and evaluated for improving the performance of monetary targets. According to the first approach, simple rules for monetary targets are derived within an optimisation framework. These rules, related to ultimate targets, are simple so that they can be announced and are flexible so that they are subject to revision when the economy drifts away from its course due to unexpected shocks. The second approach is based on indicators and complements monetary targets with exchange rate targets through a simple feedback law for determining interest rate policy. The advantage of this feedback law is that it provides the mechanism through which policy is to be revised in response to shocks. If such a feedback law is announced, private economic agents have the means of distinguishing discretionary and arbitrary changes of policy from those which are needed to bring the economy back to the announced and committed course. This approach is used to analyse and extend the suggestions in the House of Commons Report on International Monetary Arrangements. The common ground between the two approaches is an optimisation framework with respect to the parameters of either the fixed simple rules or the simple feedback laws. This is discussed in section 1. The approach of deriving simple fixed rules is illustrated in a monetarist model in which there is a link between private sector expectations and the credible announcement of monetary targets. The model is explained in section 2 and simple fixed rules are discussed in section 3. The performance of simple rules for monetary targets is evaluated in terms of a minimax strategy with model uncertainty between the monetarist model and a Keynesian model without the assumption of announcement effects. This is discussed in section 4. Optimal feedback laws are derived and analysed in section 5. The parameter sensitivity of these feedback laws with respect to the model and the objective function, as well as their behaviour under shocks, is also examined.