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Monetary policy targeting rule
- The Taylor rule is a monetary policy targeting rule. The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates. The rule considers the federal funds rate, the price level and changes in real income.
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The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates. The rule considers the federal funds rate , the price level and changes in real income . [3]
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4 days ago · The Taylor rule is an equation John Taylor introduced in a 1993 paper that prescribes a value for the federal funds rate—the short-term interest rate targeted by the Federal Open Market Committee (FOMC)—based on the values of inflation and economic slack such as the output gap or unemployment gap.
May 22, 2024 · The Taylor Rule is a formula developed by economist John Taylor that suggests how central banks should set the federal funds rate. The formula ties target rates to the metrics of...
- Brian Twomey
- 2 min
Apr 28, 2015 · The Taylor rule, which John introduced in a 1993 paper, is a numerical formula that relates the FOMC’s target for the federal funds rate to the current state of the economy. Here’s the...
May 29, 2023 · The Taylor Rule is a formula tying a central bank's policy rate to inflation and economic growth. Developed by economist John Taylor in 1993, it assumes an equilibrium...
A key stipulation of the Taylor rule, sometimes called the Taylor principle, is that the nominal interest rate should increase by more than one percentage point for each one-percent rise in inflation. Some empirical estimates indicate that many central banks today act approximately as the Taylor rule prescribes, but violated the Taylor ...
Aug 3, 2023 · Thirty years since the publication of the Taylor rule, economist John B. Taylor still owns a prime spot in the town square of economic discussions. This article looks at his far-reaching influence on monetary policy.