Making accurate forecasts of the future direction of interest rates is a vital element when making economic decisions. The focus on central banks as they make decisions about the future direction of interest rates requires the forecaster to assess the likely outcome of committee decisions based...

Support for the Taylor principle is considerable but the focus of empirical investigation has been on estimated coefficients at the mean of the interest rate distribution. We offer a new approach that estimates the response of interest rates to inflation and that output gap at various points...

We consider an experiment where we use the Taylor rule information set, inflation and the output gap, to predict the next change in monetary policy for the United Kingdom 1992 - 2000. To do this we use a limited dependent variable approach, where the next rate change could be `upwards',...