Can anyone explain to me the Taylor rule in simple and practical terms?any recommendations for working papaers out there on this topic ? tks

Can you stop double posting....?

Why not try Eric Weisstein at World of Mathematicsallu

The Taylor of the rule is not the same as the Taylor of the series expansion....The Taylor rule has been proposed by John B Taylor when he worked for the Board of Gov of the Fed in the early 90's : studying the optimal monetary policy rules, Taylor showed that an optimal rule can be proxied by very simple (linear) ones, linking the nominal short term interest rate to four variables :-long term real interest rate (normally constant, and equal to the potential growth of the economy)-Central bank inflation target (constant)-anticipated inflation (usually proxied by the bserved current (core ?) inflation rate)-output gap (spread between potential GDP and current GDP)the most famous formula is, if I remember well (please check) : i= r + target + 1.5*(inflation-target) + 0.5*(output gap)Taylor proposed to use a 'portfolio' of simple rules, ans you can find more about this on his web page (http://www.stanford.edu/~johntayl/)

Following site will help.....John B. Taylor's In particular, see the ppt named 'Inflation Targeting and Monetary Rules: Experience and Research'weare