Taxation and the Taylor Principle

Topics:
Taxes
Tags:
Currency & Foreign Exchange,
Federal Reserve Board,
Finance,
Operational Accounting
Source:
The Federal Reserve Board

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Overview: This paper discusses the Taylor rule, Taylor principal and equilibrium determinacy. When depreciation is treated as a charge against taxable income, an even larger weight on inflation is required in the Taylor rule in order to obtain a determinate and stable equilibrium. These results have obvious implications for assessing the historical conduct of monetary policy.

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Format: PDF | Size: 373KB | Date: Jan 2003 | Pages: 37

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