Does the Taylor Rule Guide US Monetary Policy? : Empirical Investigation

Language: English

Published by VDM Verlag Dr. Müller, 2011

363920834X / 9783639208344

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nach der Bestellung gedruckt Neuware - Printed after ordering - This paper estimates an interest rate reaction function for the US by using quarterly data spanning 1957:Q1-2010:Q3. We find evidence that US monetary policy can be described by the Taylor (1993) rule. Although Taylor's original rule was specified under contemporaneous set-up, there is substantial evidence that forward looking specification can replace the original version without any loss of generality. Interest rate smoothing is another dimension that does not question the robustness of the rule. The only problem underlying in estimation process is the possibility of spurious regression that comes from the nonstationary behaviour of federal funds rate and inflation. We therefore suggest to examine the existence of Taylor rule as a cointegrating relationship between interest rate, inflation and output gap.

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Title
Does the Taylor Rule Guide US Monetary Policy? : Empirical Investigation
Author
Mohammed Saiful Islam
Publisher
VDM Verlag Dr. Müller
Publication year
2011
Condition
Neu
Binding
Taschenbuch
Language
English
ISBN 10
363920834X
ISBN 13
9783639208344
Item weight
147 grams
Dimensions
22.00x15.00x0.50 cm

AHA-BUCH GmbH

Einbeck, Germany

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