The Mankiw Rule works well to fit the data for US monetary policy during the 1990s, but it doesn't work as well starting in the first decade of the twenty-first century.

Question

Quizplus · Accepted Answer

The Mankiw Rule, which is a variant of the Taylor Rule for guiding monetary policy, was more effective in the 1990s due to the economic conditions and policy environment of that time. However, the changing economic conditions, such as lower natural rates of interest and the financial crisis in the first decade of the twenty-first century, made the rule less applicable or fitting to the new economic realities.

The Mankiw Rule Works Well to Fit the Data for US