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Policy rules in macroeconomic forecasting models

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  • Todd E. Clark

Abstract

This Commentary describes how some of the Cleveland Fed?s macroeconomic forecasting models have been modified to use a Taylor rule for monetary policy. After briefly describing the Taylor rule implementation, the article shows that the Taylor rule included in one of our models successfully captures the course of monetary policy in the most recent episode of policy tightening.

Suggested Citation

  • Todd E. Clark, 2012. "Policy rules in macroeconomic forecasting models," Economic Commentary, Federal Reserve Bank of Cleveland, issue Oct.
    • Handle: RePEc:fip:fedcec:y:2012:i:oct12:n:2012-16
    DOI: 10.26509/frbc-ec-201216
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    References listed on IDEAS

    as
    1. Kenneth Beauchemin, 2011. "Shocks and the economic outlook," Economic Commentary, Federal Reserve Bank of Cleveland, issue June.
    2. Murat Tasci & Saeed Zaman, 2010. "Unemployment after the recession: a new natural rate?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Sep.
    3. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Nadav Ben Zeev & Christopher Gunn & Hashmat Khan, 2020. "Monetary News Shocks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(7), pages 1793-1820, October.

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