TY  - JOUR
AU  - Taylor,John B.
TI  - The Explanatory Power of Monetary Policy Rules
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13685
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13685
L1  - http://www.nber.org/papers/w13685.pdf
N1  - Author contact info:
John B. Taylor
Herbert Hoover Memorial Building
Stanford University
Stanford, CA 94305-6010
Tel: 650/723-9677
Fax: 650-723-1687
E-Mail: John.Taylor@stanford.edu
AB  - This paper shows that the theory of monetary policy rules is able to explain, predict, and help understand a variety of phenomenon in macroeconomics and finance, including the Great Moderation, the correlation between exchange rates and interest rates, and the shift in the response of the term structure of interest rates to inflation and output.  Although the theory was originally designed for normative reasons, it has turned out to have positive implications which validate it scientifically. And while initially focused on the United States, it has applied equally well in other countries.
ER  -