Wednesday, September 23, 2009

Thanks amv and John Talyor (fg)

Thanks amv for your link on the comment by John Taylor.

More than 1 1/2 years are gone that I have written this piece supporting Taylor's view. The figure shows the paths of the FED policy rate actually conducted and an "optimal, stability-oriented" path as suggested by the Taylor rule. The gap - an indiciator of an easing monetary policy - emerging in 2001 considerably provoked the events we need to deal with these days.