Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323190 
Year of Publication: 
2025
Citation: 
[Journal:] Empirical Economics [ISSN:] 1435-8921 [Volume:] 68 [Issue:] 6 [Publisher:] Springer Berlin Heidelberg [Place:] Berlin/Heidelberg [Year:] 2025 [Pages:] 2799-2828
Publisher: 
Springer Berlin Heidelberg, Berlin/Heidelberg
Abstract: 
Abstract We model the Fed’s decisions about interest rate adjustments via the flexible nonlinear empirical similarity (ES) concept which relies on ideas of case-based reasoning particularly suitable for decision making under uncertainty. We postulate that the Fed’s adjustment decision in a given situation should be close to those in similar economic situations. We evaluate the empirical fit of the ES concept in comparison with the linear reaction function related to the Taylor rule for the period from 1987 till 2008. We identify and analyze critical time points particularly for those Fed decisions which were conducted in rather uncertain economic environments.
Subjects: 
Taylor rule
Empirical similarity
Case-based reasoning
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version
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