Olivier Coibion, Yuriy Gorodnichenko, 01 March 2010

How long will US interest rates remain so low? This column argues that estimates using the 1993 Taylor rule are concentrating on the output gap, whereas in reality the Fed places much greater emphasis on output growth. Using an updated Taylor rule, this column favours the market view that rates will rise towards the end of 2010.


CEPR Policy Research