The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Taylor Rules

  • Athanasios Orphanides
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2411

Abstract

Taylor rules are simple monetary policy rules that prescribe how a central bank should adjust its interest rate policy instrument in a systematic manner in response to developments in inflation and macroeconomic activity. This article reviews the development and characteristics of Taylor rules in relation to alternative monetary policy guides and discusses their role for positive and normative monetary policy analysis.

Keywords

Central banks Difference rules Econometric policy evaluation Federal Reserve System Forecasting Friedman, M. Full employment Inflation Inflation targeting Interest rate rules IS–LM models Macroeconometric models Monetary policy Monetary policy rules Monetary transmission mechanism Money stock Money supply Natural growth of output Natural rate and market rate of interest Natural rate of employment Nominal income Output gap Policy design Price stability Real output Stabilization policy Taylor rules Time consistency Uncertainty Velocity of circulation Wicksell, J. G. K 

JEL Classifications

E5 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Athanasios Orphanides
    • 1
  1. 1.