In an open economy, the way monetary policy is managed can affect real output and inflation differently compared to a closed economy. The presence of a direct exchange rate channel in the Phillips Curve changes how key economic variables respond to various shocks. Under discretion, the need to balance output and inflation is less pronounced in an open economy. A central banker who prioritizes stabilizing real output over inflation can help achieve optimal policy outcomes. The differences between discretionary and committed monetary policy are less significant when there is high persistence in stochastic shocks.