Abstract
The relevance of the research topic is determined by the current unstable state of the world economy and the increasing role of central banks, which have the ability to positively influence countries’ economic development. Central banks, when implementing monetary policy, adhere to a certain strategy and accepted methods, including using monetary policy rules. The aim of this study is to evaluate the Taylor rule linking the central bank’s benchmark interest rate, the inflation rate, and the deviation of a country’s economic development from its trajectory. Developing the Taylor rule, we add a factor to the central bank reaction equation that reflects the level of uncertainty. The econometric assessment is based on statistics for two countries, the USA and the Russian Federation, whose central banks currently adhere to different monetary policy regimes introduced at different times. Despite differences between the countries’ economies and central banks’ monetary policies, uncertainty-related indices have shown their significance.
Published Version
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