TY  - JOUR
AU  - Christiano,Lawrence J.
AU  - Rostagno,Massimo
TI  - Money Growth Monitoring and the Taylor Rule
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8539
PY  - 2001
Y2  - October 2001
UR  - http://www.nber.org/papers/w8539
L1  - http://www.nber.org/papers/w8539.pdf
N1  - Author contact info:
Lawrence Christiano
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-8231
Fax: 847/491-7001
E-Mail: l-christiano@northwestern.edu

Massimo Rostagno
European Central Bank
Postfach 16-03-19
D-60066 Frankfurt am Main
GERMANY
E-Mail: Massimo.Rostagno@ecb.int
AB  - Using a series of examples, we review the various ways in which a monetary policy characterized by the Taylor rule can inject volatility into the economy.  In the examples, a particular modification to the Taylor rule can reduce or even entirely eliminate the problems.  Under the modified policy, the central bank monitors the money growth rate and commits to abandoning the Taylor rule in favor of a money growth rule in case money growth passes outside a particular monitoring range.
ER  -