However, John has argued that his rule should prescribe as well as describe-that is, he believes that it (or a similar rule) should be a benchmark for monetary policy. The Taylor rule is a valuable descriptive device. The Taylor rule is a simple equation-essentially, a rule of thumb-that is intended to describe the interest rate decisions of the Federal Reserve’s Federal Open Market Committee (FOMC). Stanford economist John Taylor’s many contributions to monetary economics include his introduction of what has become known as the Taylor rule (as named by others, not by John).
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