A Review of Monetary Policy Rules
Journal of Economic Literature
no. 2, June 2001
This article reviews Monetary Policy Rules, edited by John Taylor. The book evaluates the Taylor rule, a policy rule that specifies changes in the central bank's interest rate according to what is happening to two variables, real output and inflation. Questions are raised about (a) how well the models fit the data; (b) the validity of the assumption that there has been clear improvement in monetary policy; and (c) the rule's microfoundations.
Sims, Christopher, A.
"A Review of Monetary Policy Rules."
Journal of Economic Literature,
Central Banks and Their Policies