Proceedings of the 2024 3rd International Conference on Public Service, Economic Management and Sustainable Development (PESD 2024)

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The Evolution of Taylor Rules and Its Simulation Analysis

Authors
Guangyi Cai1, *
1School of mathematical sciences, Xiamen University, Xiamen, 361000, China
*Corresponding author. Email: 19020202204349@stu.xmu.edu.cn
Corresponding Author
Guangyi Cai
Available Online 19 December 2024.
DOI
10.2991/978-94-6463-598-0_14How to use a DOI?
Keywords
Tayor Rules; Bernanke Rules; Yellen Rules
Abstract

Taylor rules are one of the most frequently applied monetary policy guidelines by the Federal Reserve, and also an important tool for the market to analyze and predict the trend of the Federal Reserve’s policy interest rate. However, after 2000, especially after the subprime mortgage crisis, the explanatory and indicative function of Taylor rules for policy interest rates has significantly decreased. Against this background, Federal Reserve officials and economists have made a series of revisions to the variables and parameters used in Taylor rules, and several revised versions of the original Taylor rules have appeared one after another. Empirical tests have been conducted on the fit between the theoretical interest rate and the federal funds rate on several of the main versions. At the same time, it was found that the Fed’s policy interest rate adjustment actions generally lag behind the guidance of Taylor rules, and the width of the interest rate range under the guidance of Taylor rules is generally larger than the adjustment range of the Fed’s policy interest rate.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2024 3rd International Conference on Public Service, Economic Management and Sustainable Development (PESD 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
19 December 2024
ISBN
978-94-6463-598-0
ISSN
2352-5428
DOI
10.2991/978-94-6463-598-0_14How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Guangyi Cai
PY  - 2024
DA  - 2024/12/19
TI  - The Evolution of Taylor Rules and Its Simulation Analysis
BT  - Proceedings of the 2024 3rd International Conference on Public Service, Economic Management and Sustainable Development (PESD 2024)
PB  - Atlantis Press
SP  - 115
EP  - 125
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-598-0_14
DO  - 10.2991/978-94-6463-598-0_14
ID  - Cai2024
ER  -