The Taylor Rule and the Transformation of Monetary Policy

41 Pages Posted: 31 Jan 2008  

George A. Kahn

Federal Reserve Bank of Kansas City

Pier Francesco Asso

University of Palermo

Robert Leeson

Murdoch University

Date Written: December 2007

Abstract

This paper examines the intellectual history of the Taylor Rule and its considerable influence on macroeconomic research and monetary policy. The paper traces the historical antecedents to the Taylor rule, emphasizing the contributions of three prominent advocates of rules - Henry Simons, A.W. H. Phillips, and Milton Friedman. The paper then examines the evolution of John Taylor's thinking as an academic and policy advisor leading up to his formulation of the Taylor rule. Finally, the paper documents the influence of the Taylor rule on macroeconomic research and the Federal Reserve's conduct of monetary policy.

Keywords: Taylor rule, monetary policy, rules versus discretion

JEL Classification: B22, B31, E52

Suggested Citation

Kahn, George A. and Asso, Pier Francesco and Leeson, Robert, The Taylor Rule and the Transformation of Monetary Policy (December 2007). Available at SSRN: https://ssrn.com/abstract=1088466 or http://dx.doi.org/10.2139/ssrn.1088466

George A. Kahn (Contact Author)

Federal Reserve Bank of Kansas City ( email )

1 Memorial Dr.
Kansas City, MO 64198
United States
816-881-2436 (Phone)
816-881-2199 (Fax)

Pier Francesco Asso

University of Palermo ( email )

Viale delle Scienza
Palermo, Buenos Aires 90128
Italy

Robert Leeson

Murdoch University ( email )

South Streeet
Murdoch, West Australia 6150
Australia
011-61-9-360-2197 (Phone)
011-61-9-310-7725 (Fax)

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