Taylor rules and monetary policy: a global "Great Deviation"?

Boris Hofmann and Bilyana Bogdanova

BIS Quarterly Review, 2012

Abstract: Policy rates have on aggregate been below the levels implied by the Taylor rule for most of the period since the early 2000s in both advanced and emerging market economies. This finding suggests that monetary policy has probably been systematically accommodative for most of the past decade. The deviation may, however, in part also reflect lower levels of equilibrium real interest rates that might introduce an upward bias in the traditional Taylor rule.

JEL-codes: E43 E52 E58 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (111)

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