Barry Eichengreen: Reforming or Deforming the Fed?: “Proposals for a ‘Taylor rule’ are… merely a formula purporting to explain…

…why the Fed set its policy interest rate as it did in the 1980s and early 1990s, the period Taylor considered in his original study… a guide for desirable policy only if one thinks that the policies followed in that period were desirable, or, more to the point, that similar policies will be desirable in the future. It provides no direct way to address other concerns, such as financial stability, which most people will agree should, in light of recent events, figure more prominently in monetary-policy decisions.