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Central banks in advanced economies have gradually moved away from monetary policy based
on monetary targeting (founded on the quantity theory of money) and tend to focus on inflation
using some variation of the interest rate determination rule or “Taylor rule”.
What explains that evolution of monetary policy?
How does the Taylor rule work?
What is your evaluation of the efficiency of the new approaches to monetary policy in advanced
economies, using the US as an example?
Solution
What explains that evolution of monetary policy?
How does the Taylor rule work?
What is your evaluation of the efficiency of the new approaches to monetary policy in advanced
economies, using the US as an example?

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Central banks in advanced economies have gradually moved away from m.pdf

  • 1. Central banks in advanced economies have gradually moved away from monetary policy based on monetary targeting (founded on the quantity theory of money) and tend to focus on inflation using some variation of the interest rate determination rule or “Taylor rule”. What explains that evolution of monetary policy? How does the Taylor rule work? What is your evaluation of the efficiency of the new approaches to monetary policy in advanced economies, using the US as an example? Solution What explains that evolution of monetary policy? How does the Taylor rule work? What is your evaluation of the efficiency of the new approaches to monetary policy in advanced economies, using the US as an example?