The Taylor Rule Reaction Function: Estimation and Limitations
The Taylor rule reaction function estimates how central banks respond to inflation and slack, but data timing, identification, and regime...
Monetary Policy
Fiscal Dominance: When Government Debt Constrains Monetary Policy
Fiscal dominance describes the configuration in which government debt and deficits constrain a central bank's ability to use interest rates...
Dot Plot FOMC: Decoding the Summary of Economic Projections
The FOMC dot plot is the most-cited chart in monetary policy. Reading it well requires looking past the median to...
Forward Guidance Frameworks: From Open-Mouth Operations to Date-Based Pledges
Forward guidance is how central banks move long-term interest rates by managing expectations. From qualitative language to date-based pledges, the...
Average Inflation Targeting: How the Fed Replaced Strict 2 Percent in 2020
Average inflation targeting is the framework the Fed adopted in 2020 to address persistent inflation undershoots and the lower-bound constraint....
Neutral Rate of Interest: r-star and What It Means for Policy
The neutral rate of interest r-star is the unobservable benchmark that defines monetary policy stance. Estimates span 170 basis points,...
Inflation Pass-Through Exchange Rates: How Currency Moves Reach Domestic Prices
Inflation pass-through exchange rates explains how currency depreciation moves through import prices, producer costs, consumer inflation, and expectations.
Bank of Japan Explained: QQE, Yield Curve Control, and the 2024 Exit
The Bank of Japan explained from its 1882 founding through QQE, yield curve control, and the historic March 2024 exit...
Kevin Warsh Fed Chair: Taking Office Into Stagflation and a Divided FOMC
Kevin Warsh Fed chair takes office May 15, 2026, inheriting stagflation, a divided FOMC, and a 30-year Treasury yield at...
Bank of England explained: MPC, Bank Rate, Inflation Target
Bank of England explained through the MPC, Bank Rate, inflation targeting, financial stability, independence, and the institution’s role in the...