Estimated Taylor Rules updated for the post-crisis period
The Taylor Rule is often used to describe simply how central banks adjust short-term interest rates in response to economic conditions. We use this approach to analyse monetary policy in New Zealand, Australia, and the United States since the early 1990s. We find that the response of monetary policy to changing economic conditions is similar in New Zealand and Australia. Robust results could not be found for the United States, and in recent years it has become even more difficult to do so as the Federal Reserve has been constrained by the zero lower bound on nominal interest rates.
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"A Time Varying Natural Rate of Interest for the Euro Area,"
Money Macro and Finance (MMF) Research Group Conference 2004
42, Money Macro and Finance Research Group.
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"Historical monetary policy analysis and the Taylor rule,"
Finance and Economics Discussion Series
2003-36, Board of Governors of the Federal Reserve System (U.S.).
- Orphanides, Athanasios, 2003. "Historical monetary policy analysis and the Taylor rule," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 983-1022, July.
- Michael Kirker, 2008. "Does natural rate variation matter? Evidence from New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2008/17, Reserve Bank of New Zealand.
- Boris Hofmann & Bilyana Bogdanova, 2012. "Taylor rules and monetary policy: a global "Great Deviation"?," BIS Quarterly Review, Bank for International Settlements, September.
- David Archer & Andy Brookes & Michael Reddell, 1999. "A cash rate system for implementing monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, March.
- Nils Bj�Rksten & �Zer Karagedikli & Christopher Plantier & Arthur Grimes, 2004. "What Does the Taylor Rule Say About a New Zealand-Australia Currency Union?," The Economic Record, The Economic Society of Australia, vol. 80(s1), pages S34-S42, 09.
- Colin Gray, 2013. "Responding to a Monetary Superpower: Investigating the Behavioral Spillovers of U.S. Monetary Policy," Atlantic Economic Journal, International Atlantic Economic Society, vol. 41(2), pages 173-184, June.
- Thomas Lubik & Frank Schorfheide, 2003.
"Do Central Banks Respond to Exchange Rate Movements? A Structural Investigation,"
Economics Working Paper Archive
505, The Johns Hopkins University,Department of Economics.
- Lubik, Thomas A. & Schorfheide, Frank, 2007. "Do central banks respond to exchange rate movements? A structural investigation," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1069-1087, May.
- John B. Taylor, 2001. "The Role of the Exchange Rate in Monetary-Policy Rules," American Economic Review, American Economic Association, vol. 91(2), pages 263-267, May.
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