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Federal Reserve Bank of Cleveland
Economic Commentary
The Taylor rule: a guidepost for monetary policy?
Charles T. Carlstrom
Timothy S. Fuerst
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.


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Charles T. Carlstrom & Timothy S. Fuerst, "The Taylor rule: a guidepost for monetary policy?" , Federal Reserve Bank of Cleveland, Economic Commentary, issue Jul, 2003.
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Keywords: Monetary policy ; Inflation (Finance)
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