The Taylor rule: a guidepost for monetary policy?

Charles Carlstrom and Timothy Fuerst

Economic Commentary, 2003, issue Jul

Abstract: The Taylor rule, which once was mentioned only in scholarly economics journals, now is popping up regularly in newsmagazines, finance journals, and central bankers' speeches. Does the Fed follow the rule? Should it? This Commentary explains what the Taylor rule is, discusses why it seems to describe Fed interest-rate setting, and argues that the rule is most valuable as a guideline rather than a prescription.

Keywords: Monetary policy; Inflation (Finance) (search for similar items in EconPapers)
Date: 2003
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