The recent global economic crisis has caused huge losses not only financial but also and more important losses related to the general confidence in the ability of the science of economics to contribute to the political decision making in a manner that will ensure an economic, social and...

This Commentary describes how some of the Cleveland Fed’s macroeconomic forecasting models have been modified to use a Taylor rule for monetary policy. After briefly describing the Taylor rule implementation, the article shows that the Taylor rule included in one of our models successfully...

John Taylor and David Romer champion an approach to teaching undergraduate macroeconomics that dispenses with the LM half of the IS-LM model and replaces it with a rule for setting the interest rate as a function of inflation and the output gap - i.e., a Taylor rule. But the IS curve is...

This paper proposes an assessment of the monetary policy performed by the European Central Bank (ECB) and, more specifically this paper investigates to what extent the ECB monetary policy decisions were guided by financial instability signals. Our assessment is achieved by estimating a Taylor's...

Over the past several years, Taylor rules have attracted increased attention of analysts, policymakers, and the financial press. Taylor rules recommend a setting for the level of the federal funds rate based on the state of the economy. Taylor rules have become more appealing recently with the...