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  3. Journal of Economic Literature
  4. June 2001
  5. A Review of Monetary Policy Rules

A Review of Monetary Policy Rules

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Abstract

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.

Citation

Sims, Christopher, A. 2001. "A Review of Monetary Policy Rules." Journal of Economic Literature, 39 (2): 562-566. DOI: 10.1257/jel.39.2.562

JEL Classification

  • E52 Monetary Policy
  • E58 Central Banks and Their Policies