Modernizing Monetary Policy Rules: a presentation a t the Economic Club of Memphis, Memphis, Tenn

James Bullard

No 324, Speech from Federal Reserve Bank of St. Louis

Abstract: During his talk, Bullard discussed modernizing a popular monetary policy rule, a version of the Taylor rule, whose construction was based on U.S. data from the 1980s and 1990s. Since then, he noted, three important macroeconomic developments have altered key elements of policy rule construction. These developments are lower short-term real interest rates, the disappearing Phillips curve and better measures of inflation expectations. ?Incorporating these developments yields a modernized policy rule that suggests the current level of the policy rate is about right over the forecast horizon,? Bullard said.

Pages: 33 pages
Date: 2018-10-18
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