BoE’s Weale posits method of overcoming uncertainty
Refinements to Taylor rule seek to better explain policy-making
Martin Weale, a member of the Bank of England's Monetary Policy Committee, used a speech yesterday evening to set out refinements to a Taylor rule that overcome uncertainty about the natural rate of interest and spare capacity in the economy.
Giving this year's JSG Wilson Lecture at the University of Hull, Weale said estimates of spare capacity in the economy are particularly error prone, but uncertainty also surrounds the natural rate of interest. A ‘Taylor rule' attempts to describe optimal
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