Taylors Rule

(redirected from Taylor's Rule)

Taylors Rule

A general rule for central banks when deciding interest rates. The rule states that interest rates should be increased in times of high inflation and when employment is higher than full employment, and should be decreased in periods of low inflations and higher unemployment. The rule states that following these principles will encourage growth while discouraging inflation. The Federal Reserve follows this rule implicitly, even though it does not explicitly endorse it.
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Rudebusch (1998) Taylor's Rule and the Fed: 1970-1997.
Taylor's rule now calls for the federal funds rate to be well above zero if ...
Paul Krugman, Taylor's Rule on Fiscal Policy, The Conscience OF A Liberal (June 16, 2013, 8:13 AM), http://krugman.blogs.nytimes.com/2013/06/16/taylors-rule-on-fiscal-policy/.
"Taylor's Rule and the Fed: 1970-1997." Federal Reserve Bank of San Francisco Economic Review, 3.
Once the optimal Taylor's rule is obtained in its reduced form, it is estimated in a Markov-switching model for Colombia between 1990 and 2011 because the Bank of the Republic adopted an inflation targeting monetary policy midway through this period, in October 2000.
Set against Charles Taylor's rule of Liberia, Alexander Maksik's novel transmutes the bloody madness of civil war into the advancing disorientation of Jacqueline, a refugee attempting to find direction in the seaside resort on a Greek isle.
For brevity's sake, we only computed optimal interest rates when a lag of four months is included in the specification of the Taylor's rule equation.
"Taylor's Rule versus Taylor Rules," Working Paper, May.
53) states that his rule "features responses to the same macroeconomic conditions as in Taylor's rule, but with a base instrument." In countries where short-term interest rates are used as a policy instrument, it is the Taylor rule which suggests that the monetary policy instrument should be regulated according to changes in macroeconomic conditions.
Current monetary policy literature talks about the response of the federal funds rate to stabilize goal variables (inflation rate and GDP) often in the framework of Taylor's rule. The improved performance of the economy is also related to the demise of monetarism in the policy-making and academic literature.
"Taylor's Rule and the Fed: 1970-1997," Federal Reserve Bank of San Francisco Economic Review, 3, 1998, pp.
This success seems remarkable because Taylor's rule is so simple: It is set according to only four components.