Nick Timiraos
Nick Timiraos|Jul 30, 2026 05:23
Forward guidance is a statement about what the central bank intends to do or the circumstances under which it will do a certain thing. That’s very different from a reaction function, which is the mapping. It could be a Taylor rule. It doesn’t require any prediction. It says nothing about where the economy or policy is going to go; rather, how should you respond to particular conditions or tradeoffs or what have you.(Nick Timiraos)
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