A key objective of Taylor's staggered-contracts model was to show that, in an economy with nominal rigidities, monetary policy can have important effects even when expectations are perfectly rational.
However, about a decade ago, Jeff Fuhrer and George Moore pointed out that inflation was more persistent than was predicted by the model with sticky prices and rational expectations.4 Since their work, a number of researchers have suggested that "sticky information" or rules of thumb can account for this excess persistence.