That is, the rule responds directly to deviations from the Federal Reserve’s objectives - price stability and an equilibrium utilization rate. And it incorporates a preemptive response to inflation that is consistent with models that assign an important role to unemployment or output gaps in inflation dynamics.
However, implementing this  1  BIS Review 21/2000  strategy requires knowledge of the output gap and the equilibrium real interest rate - variables that appear to have been affected by structural change. As a result, there has been increased focus on how Taylor-type rules should be adjusted in light of the uncertainties associated with structural change.