US monetary policy influenced by Taylor rule, no decreased weight found
The study looked at how the Taylor rule affects US monetary policy by examining the Fed's preferences using a specific framework. They found strong evidence that the Fed considers the Taylor rule when setting interest rates. Contrary to some beliefs, the Fed did not reduce the importance of the Taylor rule during 2001-2006. The deviations from the rule during this time were due to significant negative economic shocks and were actually the best choices given the circumstances.