In the new issue of Economic Quarterly Yash Mehra and Bansi Sawhney examine whether monetary policy actions during the Greenspan era, in particular between 2002 and 2006, can be described by a "Taylor rule," a guide to monetary policy advocated by many economists. Some have argued that the federal funds rate during this period was kept too low for too long to be consistent with the Taylor rule. But if one estimates a Taylor rule using real-time data and employs a time-varying measure of core inflation, Mehra and Sawhney conclude that the estimated Taylor rule accurately describes policy during the Greenspan era.
You can find the full text of this article and others in the latest issue of Economic Quarterly at: http://www.richmondfed.org/publications/research/economic_quarterly/.
Also in the Second Quarter 2010 issue:
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