La règle de Taylor - Explique-moi l'économie

This issue of Explain Economics is devoted to the Taylor Rule in 1993. This monetary policy rule, proposed by economist John B. Taylor in 1993, describes how a central bank should adjust its policy interest rate according to the level of inflation and the level of output. According to the rule, a central bank’s policy interest rate should be set at a level that takes into account 1) the difference between current inflation and the inflation target and 2) the output gap, i.e. the difference between current actual output and potential output. While the Taylor Rule is not considered a strict rule to be followed in all circumstances, it can be seen as a guide for central banks and a way to evaluate past monetary policy. Indeed, if actual policy interest rates are close to those recommended, then monetary policy can be considered neither restrictive nor accommodative. If key interest rates are higher than those recommended, monetary policy can be considered restrictive. If they are lower, monetary policy can be considered accommodative. The Taylor rule was developed based on the decisions of the United States Federal Reserve from 1987 to 1992, a period during which key interest rates were fairly close to those recommended. On the contrary, in the early 2000s and then following the financial crisis of 2008 or the crisis due to Covid-19, monetary policy was accommodative. However, the Taylor rule has limitations. First, it can be considered an excessive simplification of the economy that does not take into account all the variables. Second, it is based on variables such as potential output that is not observable and whose estimates do not achieve consensus. Finally, the negative key interest rates that they advocate in certain cases cannot be implemented, instead unconventional monetary policies are implemented but these are not taken into account in the rule. Issue plan: 00:00 Introduction 01:04 I – The Taylor Rule 06:05 II – A Guide for Central Banks 10:19 III – Criticisms of the Rule 13:47 Conclusion Issues cited or related to this video: The ECB's traditional monetary policy:    • La politique monétaire traditionnelle de l...   The ECB's unconventional monetary policies (1/2):    • Les politiques monétaires non conventionne...   The ECB's unconventional monetary policies (2/2):    • Les politiques monétaires non conventionne...   The Covid19 crisis - The effects of the crisis:    • La crise due au Covid19 - Les effets de la...   The Covid19 crisis - The measures to address the crisis:    • La crise du Covid19 - Les mesures face à l...   Subscribe to Explain the Economy to Me: https://www.youtube.com/c/Expliquemoi... Find us also on the Explain the Economy website: https://www.expliquemoileconomie.com/ On Facebook:   / expliquemoileconomie   And on Instagram:   / expliquemoileconomie