In a speech last week Fed Chair Janet Yellen made use of policy rules, and in particular the Taylor rule, to explain her views on normalizing policy. This comes on the heels of Fed Vice-Chair Stanley Fischer’s reference to the Taylor rule in a speech earlier in the week, two influential Bloomberg View columns by Clive Crook (here and here) making the case for the Fed to use such rules, the Shadow Open Market Committee’s unanimous recommendation to use rules that way, and continued discussion of a bill in Congress which would require the Fed to state its rule and compare it with a reference rule.
In fact, Janet Yellen’s discussion of how current and upcoming policy might differ from a reference rule (the Taylor Rule) is not unlike what you might see if the policy rule legislation under consideration in Congress became law. So one can…
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Utopia, you are standing in it! 
Mar 31, 2015 @ 13:56:34
It is highly ironic that Yellen and Glen Rudebusch of the San Francisco Fed use the Taylor rule and understand it better than John Taylor. They are not following a party line however.
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