6  Here, I’m assuming that the CB is exchanging reserves and FA securities so as to control the path of a shortterm nominally risk-free interest rate. This nominally risk-free interest rate may not be the same as the interest rate on FA debt.
7  Atkeson, Chari and Kehoe (2010) and Cochrane (2011) argue (convincingly to my mind) that an aggressive Taylor rule is not sufficient to determine inflation. The former authors suggest how price level determination can be achieved using a hybrid rule that augments an activist Taylor rule with a commodity price peg.