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The many faces of the taylor rule for advanced undergraduate macroeconomics

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  • Waters, George A.

Abstract

The Taylor Rule and Fisher Relation can be represented on a graph that allows for discussion of the zero lower bound on interest rates, the existence of multiple equilibria, secular stagnation and Japan’s lost decade, among other issues. The Taylor Rule and Fisher Relation can also be included in a small macroeconomic model that can be used to study the stability under various interest rate rules under adaptive expectations or solved under rational expectations. There are a number of related empirical exercises using both descriptive statistics and regressions for undergraduates with intermediate macro level knowledge.

Suggested Citation

  • Waters, George A., 2022. "The many faces of the taylor rule for advanced undergraduate macroeconomics," International Review of Economics Education, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:ireced:v:41:y:2022:i:c:s1477388022000093
    DOI: 10.1016/j.iree.2022.100242
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    More about this item

    Keywords

    Monetary policy; Interest rate rules; Taylor rule; Zero-lower bound;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • E0 - Macroeconomics and Monetary Economics - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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