Subsequently, Taylor (1993) demonstrated how even in the practical world of monetary policy making, the monetary policy reaction function could be modeled as predetermined rules with superior policy outcome3. Let me briefly touch upon the pros and cons of rule-based monetary policy before turning to the formulation of Taylor rule.
This acceleration has been broadly mirrored in the behavior of the core producer price indexes (PPIs) for crude and intermediate materials, probably the best and most comprehensive measures of prices at early stages of processing.