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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505, The Johns Hopkins University,Department of Economics.
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2006-473, Australian National University, College of Business and Economics, School of Economics.
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12711, National Bureau of Economic Research, Inc.
- Rose, Andrew K., 2007. "A stable international monetary system emerges: Inflation targeting is Bretton Woods, reversed," Journal of International Money and Finance, Elsevier, vol. 26(5), pages 663-681, September.
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- Colin Gray, 2013. "Responding to a Monetary Superpower: Investigating the Behavioral Spillovers of U.S. Monetary Policy," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(2), pages 173-184, June.
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"Monetary policy rules in practice : Evidence from New Zealand,"
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- Nils Björksten & Özer 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 34-42, 09.
- Mesonnier, Jean-Stephane & Renne, Jean-Paul, 2007.
"A time-varying "natural" rate of interest for the euro area,"
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- Jean-Stephane Mesonnier & Jean-Paul Renne, 2004. "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.
- 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.
- Peersman, Gert & Smets, Frank, 1999. "The Taylor Rule: A Useful Monetary Policy Benchmark for the Euro Area?," International Finance, Wiley Blackwell, vol. 2(1), pages 85-116, April.
- 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, pages -, March.
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