Economics, Financial Services, Pethokoukis, U.S. Economy

The case against the Fed formally adopting the Taylor Rule

Republicans want the Fed to follow a policy rule. So do I. Here is what GOPers have in mind (via the Houston Chronicle): “The most prominent piece of legislation….would require the Fed to set interest rates based on something like the Taylor Rule, a formula written by Stanford economist John Taylor, which specifies the appropriate level of interest rates based on the pace of inflation and the gap between actual and potential economic output.” read more >