In a previous post (here), I present four regimes for Automating Fed decision making. Three of the regimes are designed to control the Federal Funds Rate (FFR) during crisis. All four regimes need to be compared to the Taylor Rule, a single equation loss function for controlling the FFR (see graphic above) and other proposed rules for the FFR.
The tracking for the FFR (red line in the graphic above) and the Taylor Rule (blue line) is pretty good but not perfect, particularly in the periods after crises (1950-55, 1970-75, 1980-1990, 200-2010 and 2020 to the present).
Notes
FOMC Measurement Model
FOMC AIC
FFR BAU Model
The BAU model is cyclical, nonlinear and stable.
FOMC Index Model
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