Explain carefully the rationale for the Taylor rule in monetary policy and discuss the extent to which modern central banks in major countries have been following Taylor rules

Essay from the year 2002 in the subject Business economics - Economic Policy, grade: 1,7 (A-), University of St Andrews (Department of Economics), course: Monetary Policy, language: English, abstract: According to Goodhart’s speech in 1998, the key decision that the monetary authorities take each month is whether, and by how much, to alter the shortterm interest rate. As central banks vary interes...