We use tests for structural change to identify periods of low, positive, and negative Taylor rule deviations, the difference between the federal funds rate and the rate prescribed by the original Taylor rule. The tests define four monetary policy eras: a negative deviations era during the Great...

The size of the output gap coefficient is the key determinant of whether quantitative easing since 2009 and continued near-zero interest rates can by justified by a Taylor rule. Fed Chair Ben Bernanke and Vice-Chair Janet Yellen have argued that John Taylor proposed a monetary policy rule with a...

I propose a methodology for estimating forward-looking Taylor rules in real time when forward-looking real-time central bank data is unavailable. The methodology consists of choosing appropriate models to closely replicate U.S. Greenbook forecasts, and then applying these models to Canada,...

Does the Taylor rule prescribe negative interest rates for 2009-2011? This question is important because negative prescribed interest rates provide a justification for quantitative easing once actual policy rates hit the zero lower bound. We answer the question by analyzing Fed policy following...

Can U.S. monetary policy in the 1970s be described by a stabilizing Taylor rule with a two percent inflation target when policy is evaluated with real-time inflation and output gap data? If so, it is problematic to use the Taylor rule as a guide to good policy as the Federal Reserve implements...

The Taylor rule has been the dominant metric for monetary policy evaluation over the past 20 years, and it has become common practice to identify periods where policy either adheres closely to or deviates from the Taylor rule benchmark. The purpose of this paper is to identify (Taylor)...

Early research on the Taylor rule typically divided the data exogenously into pre-Volcker and Volcker-Greenspan subsamples. We contribute to the recent trend of endogenizing changes in monetary policy by estimating a real-time forward-looking Taylor rule with endogenous Markov switching...

Using real-time data that reflects information available to monetary authorities at the time they are formulating policy, we find that estimated Taylor rules based on revised and real-time data differ more for Germany than for the U.S., Taylor rules using real-time data suggest differences...

The legislated policy rules proposed by the Federal Reserve Accountability and Transparency Act of 2014 and the Financial Regulatory Improvement Act of 2015 have the potential to transform the conduct of monetary policy. If enacted, the Fed would have the obligation to explicitly state a...

This paper uses real-time data to show that inflation and either the output gap or unemployment, the variables which normally enter central banks' Taylor rules for interest-rate-setting, can provide evidence of out-of-sample predictability and forecasting ability for the United States...