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Finance and Economics Discussion Series
Finance and Economics Discussion Series logo links to FEDS home page Taylor Rules
Athanasios Orphanides

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 paper 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: Monetary policy, simple rules

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Last update: May 4, 2007