[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-324812-105":59,"doc-detail-324812-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","the-taylor-rule-a-guidepost-for-monetary-policy","The Taylor Rule - A Guidepost for Monetary Policy?","","Explains the Taylor rule as a monetary policy framework and evaluates its usefulness in describing Federal Reserve interest-rate decisions since the mid-1980s. The discussion outlines the rule’s key components: a long-run inflation target, an assumed natural real federal funds rate, and how policy should react in the short run to deviations of inflation and output from targets. It also clarifies the Taylor principle and the “lean against the wind” response.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/the-taylor-rule-a-guidepost-for-monetary-policy/324812/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/the-taylor-rule-a-guidepost-for-monetary-policy/324812.png","ImageObject",300,407,{"name":92,"@type":93},"Skyler","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-14","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",17,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What is the Taylor rule and what problem does it address?","Question",{"text":113,"@type":114},"The Taylor rule is a simple monetary policy guideline that sets the federal funds rate based on inflation and output deviations from targets. It is presented as a way to keep policy consistent and reduce destabilizing “go-stop” fluctuations.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"What are the main components of the Taylor rule described in the text?",{"text":118,"@type":114},"The rule uses: (1) the Fed’s long-run inflation target, (2) a natural real (inflation-adjusted) federal funds interest rate, and (3–4) short-run responses to current inflation and output relative to potential.",{"name":120,"@type":111,"acceptedAnswer":121},"How does the Taylor rule prescribe the Fed to react to inflation?",{"text":122,"@type":114},"It requires more-than-proportional increases in interest rates when inflation is above its target. This is summarized as the Taylor principle: the real federal funds rate should be made greater than the natural rate of interest whenever inflation exceeds the target.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},324812,1790387357,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},2336464648746,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","by Charles T.Carlstrom and Timothy S.Fuerst  \n\"It seems to me that a reaction finctionin which the reul funds rate changes byroughly equal amounts in response todeviutions of inflation fiom a target of2percent and to deviations of actual frompotential output describes reasonablywell what this committee has done since1986.…If we wanted a rule I think theGreenspan Fed has done very well fol-lowing such a rule,andI think that iswhat sensible centrul bunks do.\"  \n# Remarks by then Federal Reserve GovemorJanet Yellen at the January 1995FOMC mecting\n\nThe \"rule\"Yellen seems to advocate hasbecome known as the Taylor rule,and ithas caught the attention of researchers,policymakers,and the press.In a semi-nal 1993 paper,John Taylor,the currentundersecretary of Treasury,claimed thatadhering to a simple rule or strategywhereby the central bank sets the federalfunds rate in response to two variables一inflation and deviations from potentialoutput—is a useful way to conduct mon-etary policy.He maintained that such arule could keep inflation low and stablewithout the “go-stop”fluctuations inoutput that had plagued the cconomyduring the 1970s.Taylor went furtherand claimed that the actua policy movesmade by the FOMC since 1987 are wellcharacterized by such a rule  \nClearly,the FOMC considers a myriadof data when making decisions.Yetmany agree that a simple rule like theone Taylor described does approximatethe FOMC's actual policy moves overthe past 15 years.In what sense is thistrue?This Economie Conmentaryexplains what the Taylor rule is,dis-cusses how well it predicts the actualfederal funds rate,and perhaps givessome insight into why it has sparkedso much interest.  \nFederal Reserve Bank of Cleveland  \n# The Taylor Rule:AGuidepost forMonetary Policy?\n\n■ The Taylor RuleThere is a long history in economicsextolling the virtues of rules.One reasonis that policymakers,just like individualssometimes nced help sticking to a goalthat requires long-term commitment.Rules can help policymakers stick tolong-term goals when they are temptedto deviate from them to gain somethinggood in the short run.Pursuing short-term gain may undermine long-termgoals in the same way that rolling overand hitting the snooze button on thealarm threatens one's goal of getting towork on time.But even though rules areeffective.policymakers are understand-ably reluctant to chain themselves toironclad rules.Despite their reluctance,the Taylor rule has had a big impact inmonetary policy circles,as well aseconomics.Figure 1 suggests why.TheTaylor rule seems to track,very success-fully,broad policy moves since 1987.This success seems remarkable becauseTaylor's rule is so simple:It is set accord-ing to only four components.  \nThe first factor is the Fed's long-terminflation target.This is the inflation ratethat will prevail on average over timealthough the actual inflation rate willdiffer,sometimes significantly,from thistarget at any point in time.While Taylorclaimed that a 2 percent inflation targetis preferred to 5 percent,there is noagreement on whether it should be 2,0.or,for that matter,-I percent.Taylorsimply assumed a long-run inflationtarget of 2 percent(the average inflationrate since 1985 has been 2.6 percent).Itshould be kept in mind,however,thatthere is nothing magical about 2 percentinflation,and the rule can be modifiedfor a different inflation target  \nOnce a topic to be found only in schol-arly economic journals,the Taylorrule is popping up regularly in newsmagazines,finance journals,and cen-tral bankers'speeches.Does the Fedfollow therule?Should it?This Com-mentaryexplains what the Taylor ruleis,discusses why it seems to deseribeFed interest-rate setting,and arguesthat the rule is most valuable as aguideline rather than a prescription  \nThe second factor is the \"natural\"real,orinflation-adjusted,federal funds interestrate.This is the rate that is consistentwith \"neutral\"monetary policy.That is.if the real funds rate is equal to the nat-ural real rate,then monetary","cbCaitAGfHQShfKa","https://ap.wps.com/l/cbCaitAGfHQShfKa","pdf",1127988,"English","# The Taylor Rule\n## Figure 1 and four components\n# Output and Inflation Stabilization\n## Lean against the wind\n## The Taylor principle","[{\"question\":\"What is the Taylor rule and what problem does it address?\",\"answer\":\"The Taylor rule is a simple monetary policy guideline that sets the federal funds rate based on inflation and output deviations from targets. It is presented as a way to keep policy consistent and reduce destabilizing “go-stop” fluctuations.\"},{\"question\":\"What are the main components of the Taylor rule described in the text?\",\"answer\":\"The rule uses: (1) the Fed’s long-run inflation target, (2) a natural real (inflation-adjusted) federal funds interest rate, and (3–4) short-run responses to current inflation and output relative to potential.\"},{\"question\":\"How does the Taylor rule prescribe the Fed to react to inflation?\",\"answer\":\"It requires more-than-proportional increases in interest rates when inflation is above its target. This is summarized as the Taylor principle: the real federal funds rate should be made greater than the natural rate of interest whenever inflation exceeds the target.\"}]","The Taylor Rule - A Guidepost for Monetary Policy? | PDF",1789968938,13]