The challenges that I will highlight are, in my view, made more difficult, and the case for a careful riskmanagement approach made stronger, by the need to consider both short-run and long-run versions of the stars. 4 The original Taylor rule (Taylor, 1993) uses output relative to potential in place of unemployment relative to its natural rate.
Both forms are now known as Taylor rules. -5Shifting Stars during Normalization In December 2013, the FOMC began winding down the final crisis-era asset purchase program. Asset purchases declined to zero over 2014, and in December 2015, the FOMC began the gradual normalization of interest rates that continues to this day.