Monetary Policy Rules in Emerging Countries: Is There an Augmented Nonlinear Taylor Rule?

Historical monetary policy analysis and the Taylor rule

This study examines the usefulness of the Taylor-rule framework as an organizing device for describing the policy debate and evolution of monetary policy in the United States. Monetary policy during the 1920s and since the 1951 Treasury-Federal Reserve Accord can be broadly interpreted in terms of this framework with rather surprising consistency. In broad terms, during these periods policy has...

How Useful Are Taylor Rules for Monetary Policy?

O ver the past several years, Taylor rules have attracted increased attention of analysts, policymakers, and the financial press. Taylor rules recommend a setting for the level of the federal funds rate based on the state of the economy. For instance, they may recommend raising the federal funds rate when inflation is above target or lowering the federal funds rate when a recession appears to b...

Friedman and Taylor on Monetary Policy Rules: A Comparison

The names Milton Friedman and John Taylor are associated with different monetary policy rules; but, as shown in this paper, the difference between their perceptions of how the economy works is not great. The monetary policy rules advanced by Taylor and Friedman are compared by linking the rules to the two economists’ underlying views about nominal rigidity, the source of trade-offs, the sources...

Monetary policy rules in emerging market economies: issues and evidence

The paper reviews the recent conduct of monetary policy and central banks’ interest rate setting behaviour in emerging market economies. Using a standard open economy reaction function, we test whether central banks in emerging economies react to changes in inflation, output gaps and the exchange rate in a consistent and predictable manner. In most emerging economies the interest rate responds ...

Friedman and Taylor on Monetary Policy Rules: A Comparison - Taylor conference 2007 - FRB Dallas