01737cas a2200241 a 4500 AALejournalIMF003172 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451858020 1018-5941 BD-DhAAL BD-DhAAL Rabanal, Pau. Monetary Policy Rules and the U.S. Business Cycle : Evidence and Implications / Pau Rabanal. Washington, D.C. : International Monetary Fund, 2004. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper estimates Taylor-type interest rates for the United States allowing for both time and state dependence. It provides evidence that the coefficients of the Taylor rule change significantly over time, and that the behavior of the Federal Reserve over the cycle can be explained using a two-state switching regime model. During expansions, the Federal Reserve follows a rule that can be characterized as inflation targeting with a high degree of interest rate smoothing. During recessions, the Federal Reserve targets output growth and conducts policy in a more active manner. The implications of conducting this type of policy are analyzed in a small scale new Keynesian model. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2004/164 Full text available on IMF http://elibrary.imf.org/view/journals/001/2004/164/001.2004.issue-164-en.xml IMF e-Library