Talk:Taylor rule

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This page is copied almost word-for-word from the Federal Reserve Bank of San Francisco's website, here. I'm not sure if this is with permission.

This was taken almost verbatim from San Fran Fed Reserve Page

[edit] Missing Coefficients

The coefficients a are not defined, nor is there discussion as to how they are chosen in practice.PhysPhD 19:30, 14 September 2007 (UTC)

Agreed. This is still a problem a month later. Crasshopper 01:02, 18 October 2007 (UTC)

According to Nelson (2000), "UK monetary policy 1972-97: A Guide using Taylor rules", Taylor (1993) asserted that a coefficients of a(pi)=1.5 and a(y)=.5 adequately modeled US Federal Reserve policy up to that time. There is nothing magical about those particular values though, and Taylor (1999) seems to favor higher values. In general though, a(pi) should be greater than one if the economy is to achieve its inflation target on average. (Measure for Measure 19 Oct 2007)