Date Approved

2014

Date Posted

4-9-2014

Degree Type

Open Access Senior Honors Thesis

Department or School

Economics

First Advisor

David B. Crary

Second Advisor

Kemper Moreland

Abstract

Taylor's Rule was designed to be a suggestion to the Federal Reserve System as to where to set the federal funds rate. The dynamic equation used in this study is built off the original Taylor Rule and variations of the Taylor Rule created by other economists, such as Judd and Rudebusch (1998) and Fair (2001). However, this model uses monthly data rather than quarterly data, and uses slightly different measures of the economic indicators used as the explanatory variables in the equation. The main objective of this study is to test for structural changes in the Federal Reserve's policy behavior across various Fed Chairmen since 1960 (Martin, Burns, Miller, Volcker, Greenspan, and Bernanke) using the CHOW test.

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