Federal Funds Rates Based on Seven Simple Monetary Policy Rules

Christian Garciga, Edward Knotek and Randal Verbrugge

Economic Commentary, 2016, issue July

Abstract: Monetary policymakers often use simple monetary policy rules, like the Taylor rule, as an input into their decision-making. However, there are many different simple rules, and there is no agreement on a single ?best? rule. We look at the federal funds rates coming from seven simple rules and three economic forecasts to investigate the range of results that can be produced. While there are some commonalities, we document that the differences in the federal funds rates suggested by the rules can be quite pronounced.

Keywords: Federal Funds Rate; Monetary Policy; Rules; Taylor Rule (search for similar items in EconPapers)
Date: 2016
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