the Taylor rule is beneficial if the central bank aims at optimally stabilizing inflation and output gap variability under … discretion. Placing a weight on deviations from a simple Taylor rule increases the overall relative weight of inflation … volatility in the effective loss function, which reduces the stabilization bias of discretionary monetary policy. The welfare …

This talk emphasizes the connection between inflation targeting and monetary policy rules. Inflation targeting is not … monetary policy rule without a target inflation rate. Hence, there is a symbiotic relationship between inflation targeting and … of inflation. Interest rate rules work best within a band between very high inflation and deflation. Outside that band …

economy's determinacy properties. In particular, correct inference about the interest-rate response to inflation provides no …